Growth in the Dutch economy is expected to be significantly lower this year than in 2025. This is largely due to the war in the Middle East, which has also caused inflation to rise in recent months. Although it will be higher this year than previously projected, it will remain below the 2025 level. This is evident from the Spring Projections, published today by De Nederlandsche Bank (DNB).
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Even before the war in the Middle East broke out, economic growth was slowing, mainly due to a decline in global trade and stagnant consumption. While gross domestic product growth in the Netherlands stood at 1.8% in 2025, we project growth of 0.8% for this year, lower than the 1.2% projected in December. Growth this year is being driven mainly by government spending.
Executive Board Member of Monetary Affairs Bas ter Weel said: “The structural challenges facing the Dutch economy have been known for some time, yet policy measures to boost our economy’s growth potential are still taking too long to get off the ground. To address the bottlenecks that are holding back the Netherlands’ growth potential, we need prudent and predictable government policy.”
We now project inflation in the Netherlands at 2.7% for this year, which is higher than the 2.4% we projected in December, but lower than the actual 2025 figure of 3.0%.
Current inflation trends are clearly different from those seen during the Russian invasion of Ukraine in 2022, when gas prices in particular soared and the economy was already overheating. At present, it is mainly oil prices that are rising. While people feel this at the petrol pump, it has less of an impact on overall inflation. Furthermore, the economy and the labour market were already cooling down, and households have been using energy more sparingly since 2022. Additionally, the impact of rising oil prices is less severe than it was during the oil crisis of the 1970s, when the Dutch economy relied much more heavily on oil.
The war in the Middle East and broader geopolitical tensions are holding back world trade growth this year, which also puts a brake on Dutch export growth. However, the strong demand for products and services related to artificial intelligence (AI) is providing a boost to world trade growth, from which the Netherlands is also benefiting.
Following this year’s downturn, economic growth is expected to pick up again in the coming years, reaching 1.2% in 2027 and 1.3% in 2028. Growth should also be more broadly-based in those years: in addition to government spending, exports and consumption will contribute more to growth than they have this year.
We outline two scenarios in the Spring Projections which show what happens if energy prices remain high for longer, for example because the war in the Middle East continues and the Strait of Hormuz remains closed for shipping.
In the adverse scenario, economic growth slows slightly, while in the severe scenario, the decline is more pronounced, particularly in 2027. Inflation rises in both scenarios, with the greatest impact seen next year under the severe scenario. Inflation could then reach 4.6%, which is significantly higher than our baseline projection. In practice, the ECB will respond by raising interest rates to ensure price stability. This means inflation may turn out to be lower than in the scenarios.
In these Spring Projections, we make a number of recommendations for government policy.
Our first recommendation is to reduce the Netherlands’ vulnerability to supply chain disruptions. Our dependence on fossil fuels is still to high and we need to bring it down, in collaboration with other European countries.
Second, we recommend strengthening dynamics in the Dutch business sector. Capital and labour are comparatively often tied up in less productive firms, while they have the potential to contribute more to economic growth in more productive firms. Targeted measures can remove obstacles to healthy business dynamics. One example of such a measure would be to phase out ineffective tax breaks that have kept low-productivity firms afloat for too long.
The public deficit has risen significantly in recent years, and in the coming years the distance to the European 3% public deficit limit will be small. Keeping sufficient distance from that limit that is necessary to absorb economic shocks. The current geopolitical turmoil makes prudent fiscal policy more essential than ever. Here too, it is important to phase out ineffective tax schemes. This will free up funds in the national budget, which will contribute to easing the tax burden on labour.
Media representatives can contact Bouke Bergsma by telephone at +31 653 258 400 or by email at bouke.bergsma@dnb.nl.
Voorjaarsraming 2026 (English version forthcoming)
Cijferreeksen figuren DNB Voorjaarsraming 2026
Inleiding Bas ter Weel persconferentie Voorjaarsraming 2026 (Dutch only)
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