IMF Executive Board Concludes 2025 Article IV Consultation with Kingdom of the Netherlands–the Netherlands
IMF News, July 21, 2025
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- Published: July 21, 2025
Growth outlook and macroeconomic context
- Growth is projected to reach 1.1 percent in 2025 and 1.2 percent in 2026.
- Domestic demand is expected to drive growth, supported by solid household purchasing power, even as trade tensions dampen external demand, investment, and confidence.
- Inflation is expected to continue to moderate and converge to target in late 2026.
- The economy is operating at capacity with elevated inflation and binding constraints in the labor market, housing, emissions space, and the electricity grid.
- Downside risks dominate, mainly from escalation of trade tensions and domestic policy uncertainty; elevated uncertainty will likely dampen external demand and hold back investment.
Executive Board assessment and policy priorities
- Directors welcomed the Dutch economy’s resilience and strong fundamentals but highlighted downside risks from rising trade tensions and domestic policy uncertainty, and increasingly binding structural constraints.
- Fiscal policy guidance:
- Fiscal policy should pivot from stimulating demand to increasing supply, given real household incomes now exceed pre‑pandemic levels and the economy is operating at capacity amid elevated inflation.
- Recommended supply-boosting fiscal measures include investing in infrastructure, education, and R&D; fostering private investment in housing; and implementing growth‑enhancing tax reforms.
- Implementing the capital taxation reform and further rationalizing tax expenditures would reduce distortions and enhance efficiency and equity.
- Addressing medium‑term spending pressures through structural fiscal reforms in pensions, health care and climate would increase fiscal room to maneuver.
- Structural reform priorities:
- Tackle growth bottlenecks from nitrogen depositions and electricity grid congestion; develop a strategy to reduce nitrogen depositions and accelerate plans to address grid congestion.
- Increase labor input and firm productivity via labor and human capital reforms to improve educational outcomes and vocational training, reduce labor market duality, and better integrate migrants.
- Expand availability of SME financing and promote business dynamism to encourage productivity‑enhancing investment and productivity spillovers.
- Assess and manage distributional impacts of climate policies, including through the existing tax‑benefit system, to secure public support for climate reforms.
Financial sector and housing
- Directors welcomed the financial system’s resilience, supported by ample buffers, but noted that risks are elevated and have risen; continued vigilance is needed, including during the pension fund transition.
- Recommended actions:
- Closely monitor the residential real estate market and recalibrate borrower‑based macroprudential measures as needed.
- Increase housing supply to boost affordability, facilitate access to the property ladder, and reduce banking and insurance risks from mortgage exposures.
- Adapt supervisory approaches to evolving risks, ensure supervisory authorities’ access to granular data, and maintain operational readiness of resolution plans and crisis preparedness and management—in line with 2024 FSAP recommendations.
Key statistics (selected indicators, as reported)
- National accounts (growth rates, percent):
- Gross domestic product: 2023 = 0.1; 2024 = 1.0; 2025 (Proj.) = 1.1; 2026 (Proj.) = 1.2
- Private consumption: 2023 = 0.8; 2024 = 1.3
- Public consumption: 2023 = 2.9; 2024 = 3.6; 2025 = 2.0
- Gross fixed investment: 2023 = -0.5; 2024 = 0.3
- Exports of goods and services: 2023 = 0.4; 2024 = 0.6; 2025 = 1.6
- Imports of goods and services: 2023 = -1.7; 2024 = 1.8
- Domestic demand (contribution to GDP growth): 2023 = -0.8; 2024 = 0.9
- External demand (contribution to GDP growth): 2023 = -0.2; 2024 = 0.0
- Output gap (percent of potential output): 2023 = 1.4; 2024 = 0.7; 2025 = 0.2
- Prices:
- Consumer price index (HICP), period average: 2023 = 4.1; 2024 = 3.2; 2025 (Proj.) = 3.0; 2026 (Proj.) = 2.4
- Consumer price index (HICP), end-of-period: 2023 = 4.0; 2024 = 2.5
- Consumer price index (HICP), core, period average 1/: 2023 = 7.3; 2024 = 3.5
- Consumer price index (HICP), core, end-of-period 1/: 2023 = 3.8; 2024 = 4.4
- GDP deflator: 2023 = 5.2; 2024 = 2.7; 2025 = 2.2
- Employment:
- Unemployment rate (percent, ILO definition): 2023 = 3.7
- Balance of Payments (percent of GDP):
- Trade balance (goods): 2023 = 8.0; 2024 = 8.7; 2025 = 7.8
- Current account balance: 2023 = 9.9; 2024 = 10.1
- General government accounts (percent of GDP):
- Revenue: 2023 = 42.8; 2024 = 43.0
- Expenditure: 2023 = 43.2; 2024 = 44.0; 2025 = 45.0; 2026 = 46.0
- Net lending/borrowing: 2023 = -0.4; 2024 = -0.9; 2025 = -2.2; 2026 = -3.0
- Primary balance: 2023 = -1.6; 2024 = -2.3
- Structural balance 2/: 2023 = -1.4; 2024 = -2.4
- Structural primary balance 2/: 2023 = -0.7; 2024 = -1.5
- Cyclically-adjusted balance 2/: 2023 = -1.2
- General government gross debt: 2023 = 45.2; 2024 = 43.3; 2025 = 43.8; 2026 = 45.3
Press Release No. 25/255, July 21, 2025, IMF Communications Department.