Following two consecutive quarters of economic contraction, the Netherlands has now entered into an official recession, according to new data released Wednesday by Statistics Netherlands (CBS).

After a 0.4% contraction in the first quarter of the year, the fifth biggest economy in the Eurozone contracted once again, for a 0.3% decline in the quarter between April and June.

Analysts are blaming the first recession in the Netherlands since the Covid-19 pandemic on weak exports and lower household consumption due to surging inflation which has driven up food prices and utility bills, according to CBS. In 2021 and 2022, as the economy recovered from the pandemic, economic growth surged nearly 5% each year.

CBS said, “The Dutch contraction of 0.3% is striking compared to the economic development in neighboring countries. In France and Belgium, the economy grew by 0.5% and 0.2% respectively in the second quarter of 2023 compared to the previous quarter.”

The data showed that the exports of goods and services fell by  0.7% quarter-to-quarter in the second quarter. CBS noted, “As a result, the trade balance made the most negative contribution to the contraction in the second quarter.”

Also contributing to the downturn were labor shortages, and reduced demand from other EU nations, as well as soaring interest rates.

In an interview with Dutch news agency ANP, Economic Affairs Minister Micky Adriaansens said, “Stability and predictability are now needed, so we have to be careful not to disrupt the economy and also to increase taxes.”

In the Netherlands, domestic consumption was down 1.6% as government spending grew by 0.7%.

In the second quarter, more than half of industries in the Netherlands saw their added value slump compared to the first quarter. The biggest decline was in mineral extraction, according to the statistics.

The Netherlands is now the second major EU economy to enter a recession, following Germany, which experienced its second consecutive quarter of economic contraction earlier this year.