Dutch Economic Expansion Came to a Standstill in Third Quarter

By Jurjen van de Pol

Dec. 23 (Bloomberg) -- The Dutch economy came to a standstill in the third quarter as the global financial crisis curbed consumer spending and investment and the country headed for its first recession since 1982.

The economy halted in the three months through September, the statistics bureau in The Hague said today on its Web site.

The global credit crisis is aggravating a world economic slowdown, damping exports and hurting corporate investment. The Dutch economy, the fifth largest in the euro region, will contract 0.75 percent next year and the national budget will show a deficit for the first time since 2005, the government planning agency said on Dec. 8.

Veldhoven, Netherlands-based ASML Holding NV, Europe’s largest maker of semiconductor equipment, cut its sales forecast last week and said it will slash more than 10 percent of its workforce as orders slide. With demand down and customers asking to postpone deliveries, ASML said it expects first-half sales to be “substantially lower.”

Today’s report showed that from a year earlier, the Dutch economy grew 1.8 percent in the three months through September, after 3 percent growth in the second quarter.

No European nation will avoid a recession, French Prime Minister Francois Fillon said last week as policy makers signaled an initial round of economic stimulus and bank bailouts may be insufficient to counter the slump. Germany, Europe’s biggest economy and the Netherlands’ primary trading partner, is on course for its worst contraction in more than 15 years. Europe’s car sales plunged 26 percent last month, the biggest drop since 1999.

Confidence Grows

Consumer confidence rose to minus 28 from minus 29 this month, the bureau said in separate report today. The sentiment index exceeds the median of seven estimates in a Bloomberg News survey. Producer confidence fell to minus 20.1 from minus 9.1 this month. Economists forecast December producer confidence at minus 11.

Consumer spending rose 0.2 percent in October from a year earlier, compared with a revised 0.5 percent annual gain in September, the bureau said.

To contact the reporter on this story: Jurjen van de Pol in Amsterdam at jvandepol@bloomberg.net