The Netherlands’ economy grew by 0.4% in the three months to December 2023, reversing a three-quarter period of contraction.

New figures published by Statistics Netherlands on Monday said that the growth in GDP surpassed the 0.3% market predictions and was buoyed by a strong rebound in household consumption (1.9% against -0.2% in Q3), further government spending (0.7% against 1.3%).

The news will be welcome to the government and Dutch households alike, as it follows a three-quarter period of economic contraction since the start of the last year.

Nevertheless, the statistical office noted that GDP was down 0.4% compared to 2022, due to the recession that hit the Netherlands during the first nine months of the year. This was, however, revised down from an initial estimate of 0.5%.

It also fell from a 0.8% pace of contraction in the previous three-month period.

Statistics Netherlands said on Monday that, in 2023, real household disposable income rose by 1.4% compared with the previous year, mainly driven by higher wages resulting from increased collective bargaining. 

The office explained that both employees and self-employed individuals saw an increase in income compared with 2022. Total employee compensation grew by 7.7%, with a 1.3% increase in the number of employee jobs and a 6.0% rise in collective pay. 

Self-employment income, particularly in industries like hospitality, specialised business services, real estate rental, trade, and agriculture, experienced an 8.7% increase.