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Dutch economy crept out of recession in Q1

Tuesday - 6/26/2012, 11:32am  ET

THE HAGUE, Netherlands (AP) - The Dutch economy, which has been shaken by Europe's financial crisis, managed to edge out of recession in the first quarter of 2012, the government's statistics office announced Tuesday.

In an updated look at the January-March period, the Central Bureau for Statistics said Tuesday its previous estimate that the economy shrank by 0.2 percent from the previous quarter had been revised to show growth of 0.3 percent.

The bureau said its figures showed that "the economic picture is more positive than earlier," government spending is higher than previously thought and consumer spending not as weak.

Adding to the good economic news, credit ratings agency Fitch maintained the country's coveted AAA grade.

Fitch said the rating is "underpinned by its flexible, diversified, high-valued and competitive economy as well as current account surpluses and positive net international investment position."

The agency added that the country has "strong domestic institutions, a track record of sound budgetary management and historically broad public and political consensus in support of fiscal discipline."

Prime Minister Mark Rutte's minority government collapsed in April as it tried to hammer out an austerity package to get the budget deficit back under the limit of 3 percent of GDP set by the European Union. However, shortly after the government fell, setting up a Sept. 12 general election, Rutte managed to forge a coalition that supported a broad austerity package that should bring the budget deficit back within EU guidelines next year.

Fitch warned that should a new government veer away from the policies of fiscal discipline, "this could have negative rating implications."

The Dutch economy is highly dependent on exports and has been hit hard by Europe's economic woes.

Fitch said that a "dramatic worsening of the eurozone crisis could have a severe adverse impact on the Netherlands' small and open economy and potentially bring downward pressure on the rating."

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