Inflation to stay below 3% despite war, Dutch central bank says

Inflation in the Netherlands will average 2.7% this year despite the energy price rises caused by the war in the Middle East, the Dutch central bank DNB said on Friday in its spring forecast.

That would be lower than last year’s 3% and, unusually, below the 3% the European Central Bank expects for the eurozone as a whole, after years in which Dutch price rises were bigger than the European average. DNB expects inflation to fall further to 2.3% in 2027.

The main reason is slower economic growth, which the DNB now expects to expand by just 0.8% this year, down from 1.8% in 2025 and well below the 1.2% it forecast in December.

“We are heavily dependent on world trade, and that is taking a serious knock this year,” DNB’s director of monetary affairs Bas ter Weel told a press conference reported by the Financieele Dagblad. “That reduces production in the Netherlands, and that has a dampening effect on inflation.”

Energy prices

The forecast is based on market expectations from May 21, which assume energy prices will fall back. “The market’s expectations change, which is why forecasts differ at different points in time,” Ter Weel said. “We don’t have a crystal ball.”

The Netherlands is also less exposed to the energy shock than in 2022, DNB said, because its dependence on gas has fallen considerably since the energy crisis and it does not rely on LNG shipped from the Middle East.

If there are persistently high energy prices, however, inflation would reach 3.2% this year and 4.6% in 2027.

Inflation is currently running well above DNB’s annual average: the provisional CBS figure for May was 3.5%, or 3.4% on the European harmonised measure DNB uses, implying a decline in the second half of the year.