The Dutch Economy In 2026: Moderate Growth Ahead

(MENAFN- ING)

Looking to 2026, the Dutch economy faces a mix of geopolitical uncertainty and structural constraints. The rapid shifts in trade, defence spending, and governance seen in 2025 will continue to shape outcomes, though their full impact will unfold gradually.

US tariff hikes are still weighing on exports, and secondary effects – such as intensified Chinese competition in non-US markets – are expected to grow.

Meanwhile, European defence investments and German infrastructure spending should provide some support, while a new Dutch cabinet could introduce policy changes that boost potential growth in the medium term.

We believe the consumer will make the largest contribution to economic growth in 2026, as investments and exports are set to show modest growth only and government expenditure growth slows.

Here are three key calls underpinning our base case on the Dutch economy.

For Dutch readers, we refer to this more in-depth outlook here.

Cautious Dutch consumers seem set to spend more

Dutch households are set to enjoy stronger purchasing power gains in 2026 than in 2025. This is mainly thanks to continued high wage growth, while government measures in income taxation and government allowances are also supportive in 2026. Many pensioners will benefit from the transition from the defined-benefit pension system to the new defined-contribution pension system, as it allows for quicker indexation of benefits. This could give consumption a boost after muted income developments for pensioners in 2025.

Yet, the high savings rate of households – currently around 17%, a level historically seen only during major crises – suggests that some caution remains. Even with the incomes of many households recovering from the inflation shock this year, many consumers still see prices as a reason to exercise some caution. For now, it seems that consumption growth in 2026 will be steady rather than spectacular. If confidence improves further, as it has started to do recently, spending could accelerate.

Dutch bottlenecks hold back investment in 2026

Despite a slight improvement in business sentiment, structural bottlenecks such as labour shortages, nitrogen restrictions and grid congestion continue to weigh on investment. Housing construction offers a bright spot, but broader corporate investment is hampered by moderate demand expectations and overcapacity in some (mainly industrial) sectors.

A new government is likely to prioritise tackling these constraints, as is suggested by a draft agenda written by the Social Liberals (D66) and Christian Democrats (CDA) – two parties that are most likely to be part of a broader coalition – which was released on 2 December. Although the formation of a government could well become complex, if the agenda is executed, this could lift confidence in 2026.

However, real improvements in potential output will take more time. Until then, investment growth will stay modest, leaving economic momentum reliant on increasing public investment (such as in defence and housing-related infrastructure), moderate export growth and especially accelerating consumer spending.

Inflation cools, but stays slightly above the ECB target

Price pressures have eased with energy costs falling and the euro strengthening. Food and housing costs are also expected to rise more slowly than in 2025. Still, domestic factors – such as relatively high wage cost growth, service inflation and tax adjustments (like a higher fuel tax and hike in VAT on accommodation) – will keep inflation above the ECB's 2% target.

We are forecasting an average HICP rate of 2.2% for 2026. While this is a welcome improvement from the 3.0% in 2025, it means the Netherlands will continue to face higher inflation than most eurozone peers.

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