One fifth of the economy stagnates in April and May

As a result of the coronavirus outbreak, approximately one fifth of the Dutch economy is currently largely at a standstill. The longer the corona problem lasts, the greater the share of the economy that is affected.

In ING's base case scenario, in which the virus is rapidly coming under control, it will take at least until the end of 2020 before most large sectors are back to 'normal levels' in terms of turnover. We estimate that the trough in economic activity will be in April and May. The economy will shrink by approximately 6 to 8% in 2020 compared to last year. Some consequences, such as a sharp rise in unemployment, will manifest themselves later. In an alternative scenario in which the virus reappears in the autumn, it will take at least until the end of 2021 before most of the major sectors are back to pre-corona crisis levels in terms of turnover.

Approximately one fifth of the economy is now at a standstill.

It is now mainly the hotel and catering industry, retail non-food sector and the temporary employment sector that are affected by a huge limitation in production. It is estimated that one fifth of the economy is currently at a standstill. It is too early to give an exact economic estimate of the effect of the covid-19 virus on the Dutch economy. That the impact is negative and large, however, is undisputed.

How does this continue? Basic scenario and variant

In this rapidly changing world with a new virus and rapidly succeeding policy measures at home and abroad, the uncertainty surrounding economic estimates is exceptionally high. The ING Economics Department has therefore published four international economic scenarios outlining economic developments for the next year and a half, instead of one detailed estimate. These scenarios give an indication of a reasonably favourable development, a very severe crisis as well as two middle paths. The two 'middle way' scenarios, which we consider most probable, are explored further here for the Dutch economy. These are our baseline scenario in which measures towards the summer are gradually phased out and the economic trough falls in the months of April and May. The other mid-term scenario is a variant of this, with the virus returning in the autumn. Below we discuss both scenarios for the Netherlands.

Read more on ING's website