Source: ABN AMRO

• As described in our baseline scenario (see: Global Monthly) we expect gross domestic product (GDP) to contract by about 4%. The main catalyst of this recession is the sharp slump in private consumption, which represents about 45% of total gross domestic product (GDP). In this publication we look at the extent to which the coronavirus is impacting on consumption and the hardest-hit spending categories.
• Easter weekend, usually a time for day trips, eating out and family gatherings, fell right in the middle of the lockdown period. That is clearly reflected in the figures. This year round, consumption over the Easter weekend was 22% lower than last year. The biggest decline occurred in the following spending categories: health (-80%), other goods (-90%) and home, garden and interior (-60%). The fall in the health category is remarkable, given that precisely this category enjoyed a relatively strong increase in spending during the lockdown period. Evidently, consumers spent less on personal care because they were staying at home over the Easter weekend.
• We see a clear shift from offline to online: products and services that consumers used to buy physically are now partly being purchased online. In fact, this trend has accelerated over the past weeks - probably because retailers and consumers who were formerly less active online are now both resorting to digital platforms. In the past weeks online orders placed with restaurants doubled compared to 2019. This increase, however, in no way makes up for the drop (-74%) in spending in traditional hospitality establishments. The market for home-delivered meals is much smaller than the total out-of-home market. The meal delivery market is worth an estimated EUR 1.7 billion, while the out-of-home market accounts for EUR 19 billion.
• There is a marked decline in weekend consumption compared to 2019. Average consumption in the weekends of 21 March, 28 March and 4 April was 30% lower than in the comparable weekends last year. In the lockdown period, there is almost no difference between workdays and weekends. The main reason is that spending in bars and restaurants tends to be concentrated in the weekend. Now that many of these establishments are closed, the number of transactions has obviously dwindled to a fraction of the former total.
• In times of recession, the average Dutch consumer reins in his spending much more than consumers in neighbouring countries. For that reason, economic growth here is more volatile4 than in most other countries. One reason why Dutch consumers respond so strongly to economic ups and downs is that our financial buffers are not readily available in the form of cash. On average, Dutch households have substantial illiquid funds (mainly in home and pension) and, against this, a high mortgage debt. A study of the CPB Netherlands Bureau for Economic Policy Analysis shows, for instance, that household debt in the Netherlands is about twice higher than in Germany and Belgium but that Dutch pension savings are four times higher. Dutch households hold an average of 30% of their capital in liquid assets, whereas the percentage for Belgian households is around 75%.