The Dutch economy is entering 2026 with a more moderate outlook. After economic growth of around 1.8% in 2025, growth is expected to slow significantly to approximately 0.8% this year. The slowdown reflects a combination of global uncertainty, weaker international trade, higher costs for businesses, and cautious consumer behaviour. However, the outlook is not considered negative, as gradual recovery is expected in the following years.

One of the main concerns for households remains inflation. Inflation is projected to reach 2.7% in 2026, slightly higher than previously expected, mainly due to rising energy costs. However, the current situation differs from the energy crisis of 2022, when extremely high gas prices combined with a strong economy created significant price pressure. Today, economic growth is weaker, and the labour market is cooling, meaning prices and wages are increasing at a slower pace. Inflation is expected to decline gradually to around 2.3% in 2027 and 2.4% in 2028, although uncertainty remains due to geopolitical developments and possible changes in energy prices.

Economic growth is also being affected by global instability. Tensions in the Middle East and broader geopolitical risks are limiting the expansion of world trade, which creates challenges for the Netherlands as a highly open and export-oriented economy. Dutch companies are facing higher labour and energy costs, making it more difficult for some sectors to remain competitive internationally. At the same time, businesses are delaying investment decisions because of uncertainty, while households are becoming more cautious and increasing their savings.

Government spending will provide some support for economic activity in 2026, particularly through higher investment in areas such as healthcare and defence. However, public finances face increasing pressure. The budget deficit is expected to rise to 3.3% of GDP in 2026, exceeding the European limit of 3%. A significant factor is the one-off cost of €8.5 billion related to reforming the military pension system, combined with weaker economic growth. Although the deficit is expected to decline in later years, the government has limited financial flexibility due to future spending plans in areas such as defence, climate policy, housing, and infrastructure.

The housing market remains another important challenge. House prices are expected to rise moderately by around 3% to 4% annually in the coming years, slower than in previous periods. Higher mortgage rates and reduced consumer confidence are limiting affordability improvements. At the same time, housing supply remains under pressure, as fewer new homes are being built due to higher costs, planning challenges, and economic uncertainty.

The labour market is also showing signs of adjustment. Wage growth is expected to slow to around 4% in 2026 as labour shortages become less severe. Unemployment is projected to increase gradually to around 4.2% in 2027 and 4.3% in 2028, although these levels remain relatively low by historical standards. Rather than large-scale job losses, the main change is that job creation is expected to slow, making it slightly harder for job seekers to find new opportunities quickly.

Looking ahead, the Dutch economy is expected to recover gradually from 2027 onwards. Growth is forecast to increase to around 1.2% in 2027 and 1.3% in 2028 as energy prices ease, consumer confidence improves, and global trade strengthens. However, uncertainty remains a key factor. If energy prices stay high for longer, inflation could rise further and economic growth could weaken.

Overall, the Netherlands faces a period of slower growth but not a severe downturn. The coming years will require careful decisions from the government, businesses, and households. Balancing investment in future economic strength with responsible public spending will be essential to maintaining competitiveness, sustainability, and long-term prosperity.

References 

De Nederlandsche Bank . (2026, June 12). The five key figures on the Dutch economy. Retrieved from De Nederlandsche Bank : https://www.dnb.nl/en/general-news/background-2026/the-five-key-figures-on-the-dutch-economy/?shem=rimspwouoe,

De Nederlandsche Bank . (2026, June 12). War in the Middle East is holding back economic growth and driving up inflation. Retrieved from De Nederlandsche Bank : https://www.dnb.nl/en/general-news/press-release-2026/war-in-the-middle-east-is-holding-back-economic-growth-and-driving-up-inflation/?shem=rimspwouoe,

Photo: https://mywowo.net/media/images/cache/amsterdam_rijkmuseum_01_introduzione_jpg_1200_630_cover_85.jpg