Protectionism, possibly culminating into a trade war between the United States, China and the EU, does pose a real risk to the projected economic developments in the Netherlands, the Dutch central bank said on Monday.

Additional import tariffs would weigh on international trade and dampen confidence, thereby putting a drag on the world economy, the central bank said in its latest economic forecasts.

If the trade conflict escalates, ‘the Dutch economy will be severely affected, with annual GDP growth 0.5 percentage points down in all three years,’ the bank said.

However, without a trade war, the Dutch economy is set to grow 2.5%, 2.2% and 1.9% over the next three years, the new forecasts said.

‘All signs point to a sustained boom. With corporate utilisation rates high and labour markets tightening further, businesses in a growing number of sectors are hampered by shortages of staff and other resources.’

In particular, this could mean disposable income rising by an average of 3%  in the between now and 2020, the central bank said.

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