Netherlands

GDP is set to have expanded slightly more than initially estimated 2025 (+1.7%). The economy has suffered less from international trade tensions than expected and exports proved resilient, also thanks to the re-exports component. Government spending is an important contributor to recent economic growth but household consumption also remains a stable growth driver. Meanwhile, the formation of the new government will be crucial for the investment outlook, which has suffered from prolonged uncertainty. Looking ahead, international developments will continue to play a crucial role in the open Dutch economy.  Overall, we expect Dutch economic activity to grow by +1.3% in 2026 and +1.4% in 2027.

Inflation is declining but remained higher than the Eurozone average (+3.3% on average in 2025 compared to 2.1% for the Eurozone); demand for products and workers in the Netherlands is relatively strong, which drives up prices and wages. Prices growth is set to average around the ECB’s 2% target only by 2027. 

The Netherlands’ labor market remains relatively tight. However, vacancy rates are gradually softening from the record high reached in 2022, albeit at much softer pace compared to other Eurozone countries. There is a reported shortage of staff in various sectors such as ICT, construction, healthcare and education, driven by an aging population, high demand and a mismatch between available skills and job requirements. The elevated inflation environment and labor market tightness still support sustained wage growth. The government has also taken a step for the lowest income earners by increasing the minimum wage, increasing labor cost pressures for employers.

The Netherlands maintains one of Europe's strongest business environments, consistently ranking at the top of global competitiveness indices. The country benefits from world-class logistics infrastructure centered on Rotterdam port and Schiphol airport, a highly skilled multilingual workforce, excellent digital connectivity, efficient institutions and low corruption. Its strategic position as Europe's gateway and robust innovation ecosystem continue to attract substantial foreign investment.

However, several structural vulnerabilities require attention. The housing market faces acute shortages driving unsustainable price increases, limiting labor mobility and affecting younger workers—critical concerns for a knowledge-intensive economy. Labor market tightness has created persistent skills shortages in technology, engineering and healthcare, while an aging population strains pension and healthcare systems. Energy security has become a concern following the Groningen gas field closure, increasing import dependence and exposure to price shocks. The nitrogen emissions crisis constrains construction and agricultural activities, creating regulatory uncertainty that affects investment decisions. The economy's openness, while a traditional strength, also creates vulnerability to global trade disruptions. Additionally, the favorable corporate tax regime faces increasing international scrutiny. Addressing housing, energy transition, and labor market challenges while preserving competitive advantages will be crucial for sustaining the Netherlands' economic model and business attractiveness in the coming years.