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UPDATE 2-Dutch economy unexpectedly shrinks in Q3

AMSTERDAM, Nov 12 (Reuters) - The Dutch economy unexpectedly contracted 0.1 percent in the third quarter and did not benefit from growth in trading partners Germany and France, as Dutch investment fell while consumer spending growth remained weak. Economists surveyed by Reuters had expected quarterly growth of 0.5 percent, with forecasts ranging from an expansion of 0.2 percent to 0.7 percent. "We do not expect a new recession, but we do have in our estimates for next year the possibility of a slowdown in growth," Rabobank economist Anke Struijs said. A fall of 2.4 percent in company investments compared to the second quarter weighed the most on GDP and signalled a reverse of investments growth in the preceding period, data from Statistics Netherlands (CBS) showed on Friday. "There has been a sharp swing in the stock effects. While there was a sharp increase in stock replenishments in the second quarter, it is negative this quarter so the change is huge," ABN AMRO economist Nico Klene said. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Economist instant view Table with GDP breakdown The Dutch economy, where exports are equivalent to 70 percent of gross domestic product (GDP), grew the preceding four quarters, mostly supported by a recovery in exports and government investment. Quarterly growth was revised down to 0.9 percent in the second quarter from 1.0 percent previously. Year-on-year, gross domestic product (GDP) rose 1.8 percent in the third quarter after 2.2 percent growth in the second quarter. Spreads on the Dutch two-year and 10-year bonds versus German benchmarks, which have been among the tightest compared with other euro zone countries thanks to the Netherlands' prudent fiscal policy, were little changed from Thursday. (Reporting by Marcel Michelson, Aaron Gray-Block, and Gilbert Kreijger) Keywords: DUTCH ECONOMY/GDP (Amsterdam newsroom; +31 20 504 5000; fax +31 20 504 5040; amsterdam.newsroom@news.reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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