The Dutch economy is expected to grow by 1.5 percent this year and by 1 percent in 2026. Uncertainty remains high due to the fall of the Schoof cabinet and the unpredictable trade policy of the United States, Rabobank economists warn.
According to the economists, stable governance is necessary to address the structural problems in the Netherlands. Moreover, our open economy is particularly vulnerable to abrupt changes in world trade.
A growth of 1.5 percent is still quite high, given the enormous uncertainty resulting from the trade war, according to economist Hugo Erken.
The consequences of the fall of the cabinet are limited in the short term. However, Erken adds that policies on important topics such as climate, infrastructure and the housing market will therefore be delayed. “This leads to companies and consumers being hesitant to make long-term investments.”
According to the economist, economic growth will also come under pressure in the long term because reforms are not implemented. Postponement also has negative effects on public finances because it leads to higher costs in the long term, according to Erken.
Despite the fact that the cabinet is now caretaker, economist Wouter Remmen expects that many planned government expenditures will continue this year and next year.