Dutch Household Spending Power Is Set to Fall in 2027
The Dutch economy will keep growing in 2026 and 2027, but stubborn inflation means the average household's purchasing power is projected to fall next year, the government forecaster CPB says.
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The Netherlands’ economy is proving resilient in the face of global uncertainty, but ordinary households are likely to have a little less to spend next year. That is the message from the latest forecast by the Central Planning Bureau (CPB), the government’s independent economic advisory body.
Growth holds up
Despite considerable turmoil in the wider world, the Dutch economy is still expected to grow, by 1.4 percent this year and 1.2 percent in 2027, after 1.6 percent in 2025. “The Dutch economy is resilient,” said CPB director Pieter Hasekamp, adding that, given everything happening in the world, the consequences are relatively mild.
That growth rests on several supports: strong exports, higher government spending, and the financial buffers that households built up in recent years. The machine industry is benefiting from demand from the chip sector and from investment linked to artificial intelligence, and domestic tourism is helping too. Unemployment remains low, edging up only slightly from 3.9 to 4.0 percent of the labour force. The drought, for now, is having little effect, though the CPB notes that a prolonged dry spell and problems with energy production could weigh on growth later.
But spending power dips
The less welcome news is about purchasing power, the measure of what households can actually afford once wages, taxes, benefits and rising prices are taken together. After increases of 1.0 percent in 2025 and 0.6 percent this year, the spending power of the median, or typical, household is projected to fall by 0.3 percent in 2027.
It is worth being clear about what that figure is. It is a projection based on current policy remaining unchanged, not a fixed cut, and purchasing power is a calculation, spread through the year across the supermarket till, the energy bill and other fixed costs, rather than a single deduction. The main reason for the downgrade is that inflation is proving more stubborn than previously assumed. The CPB expects prices to stay near 3 percent, at 3.3 percent this year and 2.8 percent next, with higher energy and fuel prices, linked in part to conflict in the Middle East, doing much of the work. Food and other goods become more expensive as a result.
Poverty is expected to move with these trends. It falls this year, from 3.0 to 2.6 percent of the population, but is projected to rise again slightly to 2.7 percent in 2027, as the effect of wage growth and government measures wears off towards the end of the forecast period. The number of children living in poverty, however, is expected to keep falling.
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Why this forecast matters now
The timing is significant. This forecast, the concept Macro Economic Outlook, is treated as the starting point for the negotiations between political parties over the national budget, which will be presented on the third Tuesday of September, known as Prinsjesdag. The current minority government will need support from opposition parties to get its plans through.
The finance minister, Eelco Heinen, called drawing up the budget a “nervous” process, saying the margins are small and that he wants to present plans that can command broad support, while acknowledging that “does not mean it is easy”. There is a little room to work with: the government deficit is forecast at close to 3 percent of GDP this year, near the European ceiling, before falling to 2.1 percent in 2027. Government finances are under pressure from rising spending on defence, social security and interest.
The CPB’s advice
The forecaster also offered a clear piece of guidance for the budget talks. If the government wants to shield people from high energy prices, the CPB argues, it should focus on the most vulnerable households, those on low incomes, particularly in poorly insulated homes, rather than spreading support across everyone. Broad measures that protect all households from price rises, it repeats, are unwise; better, it suggests, to help lower-income families with a badly insulated home to make it more energy efficient.
The CPB stresses that its projections are model-based calculations, not exact predictions, and the final Macro Economic Outlook will be published on Prinsjesdag alongside the government’s budget. For now, the headline is a familiar Dutch balance: an economy that keeps ticking over, and households that, next year, may find their money does not stretch quite as far.