Business

Ongoing conflict in the Middle East and the blockade of the Strait of Hormuz are dampening Dutch economic growth by inflating energy prices and disrupting global trade. While economists at Rabobank do not predict a full recession, they have downgraded overall growth forecasts to just 1 per cent this year and 0.8 per cent next year. Major sectors like manufacturing, construction, and transport are facing stagnation due to high fuel costs and falling investment, while inflation and tax rises squeeze consumer spending in retail and hospitality. Conversely, the technology and digital services sectors remain largely unaffected, continuing to grow strongly as businesses invest heavily in artificial intelligence and automation to boost productivity.

Fixed energy contract rates in the Netherlands are now 13% higher than before the start of the Iran war, according to new figures from the Authority for Consumers & Markets (ACM). Variable tariffs have not yet risen, but many suppliers traditionally adjust prices on 1 July. Reduced oil and gas flows through the Strait of Hormuz have pushed up wholesale gas prices, while more Dutch households are opting for fixed‑rate contracts.

Dutch semiconductor startup Qualinx has established the first fully European production chain for microchips by manufacturing at GlobalFoundries' secure facility in Germany. The breakthrough ensures that all data, manufacturing processes, and physical logistics for critical defence and aerospace components remain entirely under European control. This milestone aligns with recent European Commission proposals to fast-track regional self-reliance and reduce dependence on foreign technology providers.

Major retail organisations are leaving VNO-NCW because of sharply higher membership fees. CBL has already ended its membership, and others are reconsidering their position as wage costs and inflation rise. The sector says it must weigh the value of affiliation against the growing financial burden.

The AEX index in Amsterdam closed 0.6% lower on Friday at 1041.10 points, dragged down by payment provider Adyen, which plunged nearly 9% following a negative US analyst report warning of lost market share and rising competition. Semiconductor giants ASMI, Besi, and ASML also suffered losses of up to 4.3% following global tech declines, while steelmaker ArcelorMittal fell 4.7%. These losses offset gains by consumer giant Unilever, which jumped over 3%, and Heineken, which rose 1.9% amidst shareholder pressure to break with tradition and hire an external CEO to replace Dolf van den Brink. Elsewhere, Air France-KLM dipped 1.2% after a Barclays downgrade, and global oil prices slid by up to 2.6%.

More measures are needed to fix a €19.4 billion funding shortfall facing housing associations, as current government plans only solve the crisis on paper, Housing Minister Elanor Boekholt-O'Sullivan has warned. While the coalition's proposals—including annual funding boosts, higher rents for high earners, and relaxed European rules—theoretically turn the deficit into a surplus, they fail to account for reality. The minister pointed out that the calculations ignore high interest rates driven by the war involving Iran and wrongly assume that wealthy associations will easily subsidise struggling ones, threatening the target of building 30,000 new homes a year and prompting the creation of a new financial advisory committee.

Dutch farmers and growers saw their product prices drop by over 10% in the first quarter of the year compared to last year, driven by a 40% plunge in potato prices due to a bumper harvest and falling global demand for chips. According to Statistics Netherlands (CBS), prices for milk, eggs, fruit, and grains also fell significantly, even as production costs for fertilisers and veterinary fees rose. Although energy costs were initially lower during the quarter, the farming group LTO warned that the subsequent outbreak of war involving Iran has since sent global fuel prices soaring, prompting calls for government support to prevent rising costs from hitting food affordability.

The Amsterdam AEX index opened lower on Friday, dragged down by a 3 per cent drop for chip giants ASMI, Besi, and ASML following a tech sell-off in the US and Asia. As global investors shift from tech stocks to traditional sectors ahead of the latest US jobs report, wider European markets remained mixed, while Asian tech shares suffered heavy losses. On the local market, paint maker AkzoNobel and builder Heijmans posted gains, but Air France-KLM shares fell after a downgrade by Barclays, and Heineken investors piled pressure on the brewer to appoint an external CEO.