Dutch economic and fiscal outlook

The CPB Centraal Planbureau has issued economic forecasts for the Netherlands, projecting a 0.6 percent rise in household purchasing power in 2026 followed by a 0.3 percent decline in 2027. This downturn is attributed to rising energy and fuel prices, as well as higher income taxes. While the economy is expected to remain resilient with low unemployment, inflation is projected to remain persistent at 3.3 percent this year and 2.8 percent next year.

In response to these projections and an increasing budget deficit—expected to reach nearly 3 percent of GDP this year due to defense pension expenditures—Finance Minister Eelco Heinen has signaled that requests for additional funding will face a ‘closed door’. The minority government is currently navigating complex budget negotiations that involve significant cuts to social safety nets and increased defense spending. Prime Minister Rob Jetten has expressed a more pessimistic outlook than the CPB, suggesting there is less fiscal space than the agency estimates.

Recent CPB analysis details how the 2027 decline will impact different demographics. Middle-income households are expected to see a 0.3 percent decrease as inflation and taxes offset wage growth. Couples without children under retirement age face the sharpest decline, estimated at 0.5 percent. Families with children may see a smaller 0.2 percent decrease due to child-related benefits. Retirees are a notable exception, with a projected 1.1 percent increase in 2026, though analysts suggest this may be an incidental result of the transition to a new pension system rather than sustained growth.

Updated projections indicate that the 2027 decline will be driven by government plans including higher deductible amounts and a new defense tax. CPB Director Pieter Hasekamp has advised the government to prioritize home insulation and emergency energy funds over generic support.