Dutch Central Bank forecasts 0.8% Netherlands growth in 2026 and a 3.3% budget deficit

The Dutch Central Bank has published its Spring Forecast, projecting slower Dutch economic growth in 2026 as higher energy prices, geopolitical uncertainty and more cautious households and businesses weigh on activity. It expects gross domestic product growth of 0.8% in 2026, down from 2025, while inflation eases to 2.7% but remains slightly higher than it had expected in December. The bank said the inflation impact of higher energy prices should remain moderate for now because growth is weaker and the labor market is cooling, unlike during the 2022 energy crisis. Growth is then expected to recover gradually to 1.2% in 2027 and 1.3% in 2028, assuming energy prices fall, confidence improves and world trade picks up. Inflation is forecast at 2.3% in 2027 and 2.4% in 2028, with two scenarios included to reflect uncertainty around the war in the Middle East and its effect on energy prices. The 2026 budget deficit is seen rising to 3.3% of gross domestic product, above the European Union's 3% limit, largely because of a one-off EUR 8.2 billion cost for military pension reform and a weaker growth outlook. House prices are expected to rise by 3% to 4% a year, wage growth at companies is projected at 4.0% in 2026 and to slow further thereafter, and unemployment is forecast to rise to 4.2% in 2027 and 4.3% in 2028. The forecast assumes the Jetten cabinet coalition agreement and also incorporates the recent energy support package. It does not include the proposed increase in the state pension age because the bank judged there was demonstrable parliamentary resistance before the forecast closed on 21 May 2026.