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Dutch economy to show moderate growth but deficit will rise

July 10, 2025
Photo: Depositphotos.com

The impact of geopolitical uncertainty has had a limited impact on the Dutch economy so far and growth is likely to be moderate this year and in 2026, the government’s macro-economic forecasting agency said on Thursday.

At the same time, the government deficit will rise between now and 2030 based on current economic strategy, the CPB said in its latest analysis. The forecast does not take the commitment to boost defence spending to 3.5% of GDP into account or the impact of a change in government, set for later in the year.

Despite the negative impact of US import tariffs on global trade and increased financial market volatility, the Dutch economy continues to benefit from strong domestic demand, supported by both consumer and government spending, the CPB said.

Median purchasing power is projected to rise by 0.7% in 2025 and 1% in 2026, largely due to real wage growth.

The CPB expects the budget deficit to reach 2.5% of GDP by 2030, as spending continues to outpace revenue. In particular, rising costs for healthcare and social security are putting pressure on public finances, partly due to an ageing population.

“The Netherlands is still in good shape, but policy challenges around defence, climate, nitrogen and population ageing are piling up,” said CPB director Pieter Hasekamp. “It is essential that we make choices now and invest in our future earning capacity and overall welfare.”

The figures have been released earlier than usual to serve as a baseline for assessing the economic impact of party manifestos ahead of October’s general election.

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