Economic contraction of 0.3 percent in Q1 2023

According to the second estimate conducted by Statistics Netherlands (CBS), gross domestic product (GDP) decreased by 0.3 percent in Q1 2023 relative to Q4 2022. The contraction in the first quarter of 2023 is mainly due to increased withdrawals from gas storage facilities. The second GDP estimate is published 85 days after the end of each quarter.
The growth rate for Q1 2023 has been adjusted upwards. In the first estimate, which was published on 16 May, contraction relative to Q4 2022 amounted to 0.7 percent. In particular, the trade balance and investments contributed to the upward revision of GDP growth. For example, exports of goods fell less sharply and exports of services rose more substantially. Imports of goods and services have also been revised upwards, but to a lesser extent than exports.

On the one hand, the adjustment is the result of new, more complete data for the first quarter of 2023 and, on the other, of adjustments to the annual figures for 2021 and 2022 and the reconciliation of the quarterly estimates with these new annual figures. This is done every year in June.

Second estimate
The second estimate is conducted 85 days after the end of the quarter. The first estimate, which is calculated 45 days after the end of the quarter, is based on the most recent data available at that moment. After the first estimate, more new information about the state of the Dutch economy keeps pouring in, e.g. data on sectors including construction, business services, accommodation and food services, the public sector, care and financial institutions. These data are subsequently incorporated into new calculations.

In absolute terms, the adjustment in the second estimate relative to the first estimate averaged 0.1 percentage points over the five-year period 2018-2022, with the two extremes ranging between -0.3 and 0.7 percentage points, both occurring in 2021.

Adjustments of annual and quarterly figures
Simultaneously with the publication of the second estimate over Q1 2023, revised annual figures over 2021 and 2022 are published. On the basis of the most recent data, the growth rate for 2021 has been adjusted from 4.9 to 6.2 percent. The economic growth rate for 2022 has been adjusted from 4.5 to 4.3 percent.

With each new estimate, CBS also recalculates the seasonally adjusted series of previously published quarters. Together with the adjustments of the quarterly estimates to the new annual figures for 2021 and 2022, this has led to adjustments to GDP growth in the quarters from 2017 to 2022.

Today, CBS not only publishes adjusted annual figures for GDP, but also for gross national income (GNI). The adjustments to GNI are considerably larger than in recent years. The GNI for 2022 has been revised upwards by 46.4 billion euros and for 2021 by 48.2 billion euros. This is not only attributable to an upward adjustment of nominal GDP, but mainly to an upward revision of the primary income balance between the Netherlands and abroad, partly due to new information on the profits of listed multinationals.

Growth relative to Q1 2022
Year-on-year, GDP increased by 1.9 percent in Q1. In the first estimate, the growth rate also amounted to 1.9 percent. Growth in Q1 2023 was mainly due to more investments and higher household and public consumption.

49 thousand more jobs
The second estimate shows that the number of employee and self-employed jobs increased by 49 thousand in Q1 2023 compared to Q4 2022. The first estimate suggested an increase of 63 thousand jobs.

The second estimate for Q1 2023 further suggested a year-on-year increase of 270 thousand employee and self-employed jobs, versus 278 thousand according to the first estimate.

Job figures are adjusted when additional information becomes available.

Image © Hollandse Hoogte / Ramon van Flymen
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