Oil and gas prices have already risen sharply following the recent U.S. and Israeli attacks on Iran and Iran’s subsequent countermeasures. If prices continue to move in line with early‑March market expectations, inflation this year could end up 0.6 percentage points higher than previously forecast.
Purchasing power
Purchasing power—how much households can actually spend—is still expected to grow this year under the baseline scenario. On average, real disposable income will rise by at least 1.4 percent. In 2027, however, this improvement is expected to level off. Although wages will continue to increase, several tax measures will offset part of that gain. More people will shift into higher tax brackets because thresholds will rise only slightly with inflation, and income tax rates in the first two brackets will also increase.
Poverty
The Netherlands Bureau for Economic Policy Analysis (CPB) expects the number of adults and children living in poverty to continue declining this year, extending the trend of recent years. In 2026, however, this progress is projected to stall. If energy prices rise further due to the conflict involving Iran, the risk of poverty will increase accordingly.
Gross domestic product (GDP)
The CPB forecasts steady economic growth for the Netherlands through 2027. GDP is expected to expand by 1.4 percent in 2026 and 1.1 percent in 2027, following 1.9 percent growth in 2025. Unemployment is projected to rise slightly, reaching 4.1 percent of the labor force this year and 4.3 percent in 2027.
The CPB also warns that government finances are deteriorating. The budget deficit is widening because spending on climate policy, defence, and healthcare is not fully funded. Over the longer term, the Netherlands risks breaching the European Union’s deficit ceiling of 3 percent of GDP.
ANP | NEWS BRAINPORT
