## IMF Executive Board Concludes 2025 Article IV Consultation with Kingdom of the Netherlands–the Netherlands

_IMF News, July 21, 2025_

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## Bibliographic details
- Published: July 21, 2025

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### 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.*

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## References

- [Kingdom of the Netherlands-The Netherlands and the IMF](http://www.imf.org/external/country/NLD/index.htm)
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_Source: https://www.imf.org/en/news/articles/2025/07/18/pr-25255-netherlands-imf-executive-board-concludes-2025-article-iv-consultation_