Recent economic data indicates that the Dutch economy entered 2026 with strong momentum, but the escalating conflict in the Middle East introduces new uncertainties, particularly through energy markets and global trade disruptions.
According to ING economists Bert Colijn and Marcel Klok, several indicators have recently surprised to the upside. Economic growth in the fourth quarter of 2025 exceeded expectations, supported by strong goods exports and steady government consumption. This positive performance has carried into early 2026.
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Industrial activity also showed encouraging signs. Manufacturing output increased by 0.4% month-on-month in January, while retail sales grew despite weaker sentiment among retailers. At the same time, economic sentiment indicators improved at the beginning of the year, especially within the manufacturing sector.
However, the war in the Middle East has significantly increased risks to the Dutch economic outlook. The Netherlands is particularly exposed to disruptions because it is both a major logistics hub and a large importer of energy. Prolonged instability could therefore affect supply chains, increase energy prices and weigh on economic growth.
Despite these risks, the Dutch economy has demonstrated considerable resilience in recent years. Following the pandemic, the Netherlands recovered faster than many advanced economies and required relatively moderate fiscal support. During the 2022 energy crisis, inflation rose sharply but GDP contracted only modestly, and unemployment remained stable. Similarly, last year's trade tensions did not result in declining export growth.
Household finances have also remained relatively strong. Forecasts from the Netherlands Bureau of Economic Policy Analysis (CPB) suggest that many households could see purchasing power increase by around 1.3% in 2026, driven by government measures and wage growth exceeding price increases. Pension reforms are also expected to benefit many retirees.
Nonetheless, the war could affect consumer confidence. Rising energy costs may reduce purchasing power growth and could lead to a temporary inflation spike, although ING economists do not expect a repeat of the double-digit inflation seen in 2022 if the conflict remains short-lived.
Another concern is consumer sentiment. Petrol prices in the Netherlands are already relatively high compared with neighbouring countries, making potential price increases particularly visible to households. Combined with geopolitical uncertainty, this could encourage consumers to save more and spend less, slowing consumption growth.
For now, ING expects household consumption to grow by about 1.5% in 2026, assuming the conflict remains limited. Overall, while the Dutch economy began the year from a position of strength, the evolving geopolitical situation has increased downside risks to what has otherwise been a resilient economic outlook.
More information:
ING
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