Dutch economy grows but purchasing power stalls in 2027 due to tax hikes
The Dutch economy is set for modest growth in 2026, with purchasing power rising by 1.4%. However, tax increases in 2027 will offset wage growth, leaving households with little change. Rising government spending on defence and social security adds pressure on public finances.
| Indicator | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP Growth | - | 1.4% | 1.1% |
| Purchasing Power Growth | - | 1.4% | ~0% |
| Inflation | - | ~2% | ~2% |
| EMU Balance (% of GDP) | -1.6% | - | -1.9% |
| Long-term EMU Balance (2034) | - | - | -3.1% |
| Key Drivers | - | Household spending, government expenditure | Tax increases, defence spending |
| Energy Inflation Impact | - | +0.6% (if current trends persist) | - |
The Central Planning Bureau (CPB) is the Dutch government’s independent economic forecasting agency. It provides projections that guide fiscal policy, budget decisions, and economic planning, ensuring transparency and evidence-based governance.
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Central Economic Plan (CEP) 2026
The Dutch economy continues to grow steadily for now, but international uncertainty remains high. Purchasing power is expected to rise in 2026, but will remain roughly stable in 2027 as tax increases offset real wage growth. At the same time, government finances are deteriorating due to higher spending, particularly on defence. This is according to the latest projections from the Central Planning Bureau (CPB).
The CPB published the Central Economic Plan (CEP) on 12 March, outlining economic and fiscal projections. Despite significant geopolitical uncertainty, economic activity has not stalled in recent months. GDP is projected to grow by 1.4% in 2026 and 1.1% in 2027, driven mainly by rising household spending and increased government expenditure. However, the tense international situation means economic uncertainty remains very high.
Purchasing power and inflation
Average purchasing power is expected to rise by about 1.4% in 2026, as wage growth outpaces inflation, which is gradually moving towards 2%. In 2027, purchasing power will remain roughly stable, as tax increases from the coalition agreement offset real wage growth. The recent rise in energy prices over the past two weeks is not included in this projection. Based on current market expectations for gas and oil prices, energy inflation could be higher, directly increasing total inflation by around 0.6 percentage points.
Government finances
Higher spending on defence, social security and healthcare is expected to push the EMU balance from -1.6% of GDP in 2025 to -1.9% in 2027. In 2026, the EMU balance will be further strained by a one-off transfer of military pensions. Household tax burdens will also increase, including higher income tax as a result of the coalition agreement in 2027. The projection also includes an outlook up to 2034. Over the longer term, spending on areas such as defence and climate will continue to rise faster than revenue, pushing the EMU balance to an estimated -3.1% of GDP by 2034.
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This Central Economic Plan includes an analysis of the relationship between economic dynamism and strategic autonomy titled 'Resilience through innovation'. In addition, a accountability document for CEP 2026 will be published on Tuesday, 17 March 2026.
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Resilience through innovation
Geopolitical uncertainty has increased significantly in recent years. As a result, Europe and the Netherlands are reconsidering their economic policies. Reports such as the Draghi Report and the Wennink Report emphasise that innovation is key to maintaining economic strength and a strong position in global production and trade chains. At the same time, productivity growth in the Netherlands and Europe has been slowing for a long time.
Update of Medium-Term Outlook up to 2034 (March 2026)
The Central Economic Plan (CEP) 2026 includes an outlook of budgetary and economic developments up to 2034.
Central Economic Plan (CEP) 2026, figures
Key data 2024-2027, March 2026
Also see the explanation of the figures and concepts in the key data and additional key data.