Economic Outline

Economic Indicators

The Netherlands is the fifth-largest economic power in the Eurozone and the third-largest exporter of goods and services. The country is very open to trade and consequently to the global economic conjuncture. After economic stagnation in 2023 (+0.1%), real GDP growth in the first half of 2024 was volatile, mainly due to fluctuations in net trade, which shifted from strongly negative in Q1 to strongly positive in Q2. Following a contraction in the first half, private consumption in the second half of 2024 benefitted from strong real wage growth, with contractual wages rising above 6% and a tight labour market. Investment growth picked up modestly as financial conditions improved and public investment increased. Overall, GDP growth in 2024 was estimated at 0.6% by the IMF. Looking ahead, private consumption is expected to rise further, supported by solid wage growth, falling inflation, and tax cuts boosting households' real disposable incomes. The outlook for business investment and trade is also set to improve, driven by easing financial conditions and a better external environment. Real GDP is forecast to grow by 1.6% in 2025 and 1.8% in 2026.

According to CBS, government revenues and expenditures both rose by 7% in the first three quarters of 2024. Revenues increased by over EUR 24 billion, driven by a EUR 22 billion rise in premiums and taxes, while other revenues grew by nearly EUR 2 billion. Total expenditure also rose by nearly EUR 24 billion, with benefits and healthcare spending accounting for almost EUR 14 billion. In 2025, the budget deficit is expected to rise to 1.9%, partly due to a court ruling requiring tax refunds (impact: 0.5 pps) and income tax cuts in lower brackets. Higher public investment will further increase spending (EU Commission). Public debt amounted to 42.3% of GDP in 2023, although higher deficits are expected to raise the debt ratio to 45.1% in 2025 and 46.2% in 2026, remaining below the euro area average. The Netherlands' strong external position is driven by recurrent high current account surpluses and its role as a global trading hub. From 2020 to 2024, surpluses averaged 8.4% of GDP, reflecting high domestic savings. A multinational-dominated corporate sector with significant foreign assets supports a net international investment position of 54.1% of GDP in 2023 (Fitch Ratings). Statistics Netherlands (CBS) reported that consumer prices in the Netherlands rose by 3.3% in 2024, down from 3.8% in 2023, with housing and tobacco prices as the main drivers of inflation. For this year, the IMF forecasts inflation at 2.3%, followed by 2% in 2026.

The Netherlands presents a very high income per capita, which is distributed in a relatively equal manner. The GDP per capita is above the EU average and was estimated at USD 83,823 in 2024 (PPP – data IMF). The labour market remains strong, with low unemployment and more vacancies than job seekers. However, employment growth has slowed. As labour force growth outpaces weak job creation, unemployment is expected to rise slightly from 3.9% in 2024 to 4.2% in 2025 and 4.5% in 2026 (IMF).

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