The Dutch economy shrank 0.2 per cent in Q3 as rising interest rates slowed down the housing market, and increasing inflation braked on consumption.

The Netherlands, the euro zone’s fifth largest economy, performed worse than expected in the quarter. Economists, on average, had predicted 0.0 per cent growth.

Investments dropped 1.7 per cent as increasing mortgage rates cooled the years-long boom in the country’s property market. On the other hand, consumption growth slowed to 0.1 per cent.

The Dutch economy was 3.1 per cent larger than in Q3 of 2021 when COVID-19 restrictions still limited consumption. Economic growth is likely to decline to 1.5 per cent next year from an estimated 4.6 per cent in 2022, as ballooning energy bills and rising living costs further limit consumer expenditure.