The average Dutch household is unlikely to see any financial improvement this year, as the Iran conflict continues to push up global energy prices. The Central Planning Bureau (CPB) warns in a new analysis that the surge in oil and gas prices is eroding purchasing power more sharply than previously expected.
In its latest assessment, the CPB modelled several scenarios based on market expectations for energy prices. In the baseline scenario, that follows current market trends, inflation is projected to rise to nearly 4 percent this year. That is a notable jump from the bureau’s estimate just a month earlier, when it expected inflation to reach just under 3 percent under similar assumptions.
These faster‑rising prices directly weaken purchasing power, determining how much households can buy with their income. Before the conflict escalated, the CPB expected purchasing power to grow by around 1.5 percent this year. Under the updated scenario, that growth disappears entirely. The bureau also warns for an increase in poverty levels.
Inflation Scenarios
The CPB also examined situations in which energy prices remain elevated for shorter or longer periods. In those cases, purchasing power could fall by more than 1 percent, allowing inflation to exceed 5 percent.
The economic impact extends beyond household budgets. If energy prices follow current market expectations, Dutch GDP would expand by around 1 percent this year and slightly less next year. The longer high energy prices persist, the weaker the growth will be. In a prolonged‑price scenario, the bureau warns that the Dutch economy could see almost no growth by 2027.
@anp | NEWSBRAINPORT
