Dec. 9 (Bloomberg) -- The Dutch economy probably fell back into a technical recession in the second half the year as Europe’s debt crisis intensified, according to the country’s central bank.
The economy shrank 0.3 percent in the third quarter and there’s “no reason to assume growth resumed” in the current three-month period, the Amsterdam-based central bank said on its website today. A recession is defined as two consecutive declines in gross domestic product. The central bank cut its forecasts for 2011 and 2012 economic growth and said unemployment will rise through 2013.
“The unknown outcome of the European debt crisis causes a lot of uncertainty,” the central bank said. “In the short- term, decisions must be taken that are crucial for the functioning of the European monetary union.”
European leaders started talks in Brussels late yesterday on a strategy to end the crisis that’s threatening to tip Europe back into recession. The European Central Bank cuts it benchmark interest rate yesterday and offered banks unlimited cash for three years to boost lending.
The Dutch central bank said the economy of the Netherlands, the fifth-largest in the euro area, may expand 1.4 percent this year, compared with a June estimate of 2.2 percent. It lowered its 2012 growth forecast to 0.2 percent from 1.7 percent. The economy may grow 1.3 percent in 2013, it said.
Unemployment will rise to 5.3 percent in 2012 and 5.9 percent in 2013 from 4.4 percent this year, according to the central bank.
--Editors: Fergal O’Brien, Andrew Atkinson
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