Economic indicators signalled robust momentum for the Netherlands at the start of 2026, but the conflict in the Middle East has complicated the outlook, according to analysis from ING.
Growth in the fourth quarter of 2025 surprised on the upside, propelled by strong goods exports and steady government consumption, creating a positive carryover effect into 2026 projections. Early-year activity metrics reinforced that picture: manufacturing production rose 0.4% month-on-month in January, while retail sales expanded even as consumer sentiment showed signs of strain.
Composite sentiment measures from the European Commission for January and February improved relative to the close of last year, with the manufacturing component registering the most noticeable gain. Those sentiment improvements accompany the production and retail figures, suggesting activity at the turn of the year was broadly constructive across several sectors.
Still, the outbreak of war in the Middle East has disrupted global energy and transport markets, introducing major uncertainty into the Dutch outlook. As a prominent logistics hub and a significant importer of energy, the Netherlands is exposed to volatility in shipping and fuel markets. ING notes that while Dutch industry is energy-intensive in places, the overall exposure of its energy-intensive industries is smaller than that of neighbouring Germany.
The Dutch economy has shown resilience through previous shocks, including the pandemic and the earlier energy crisis. Unemployment remained contained and fiscal support to households helped limit sharper downturns. Last year’s trade war did not translate into falling export growth. Nevertheless, structural vulnerabilities remain: gas reserves are very low, leaving the country more sensitive to energy-price shocks.
On the household side, the Netherlands Bureau of Economic Policy Analysis expects many categories of households to see meaningful improvements in purchasing power this year, with a median gain of roughly 1.3%. That gain is attributed in part to government measures and wage growth outpacing price increases. The transition to a new pension system also leaves many pensioners better off.
Higher energy inflation stemming from the conflict risks eroding those purchasing power gains. Dutch petrol prices are already elevated relative to peers, making further increases a visible concern for consumers. At the same time, the household savings rate remains elevated versus its long-term average, a pattern primarily driven by price perceptions rather than a return to pre-crisis saving behaviour.
ING sets out a conditional scenario to illustrate the possible near-term path: if the conflict is short-lived, the bank expects household consumption to expand by about 1.5% this year. Under that limited-conflict scenario, ING still anticipates decent economic growth to continue, but it emphasises that downside risks have increased in an otherwise resilient economy.
Analysis takeaway - The Netherlands entered 2026 with momentum across exports, manufacturing and consumption, supported by fiscal policy and nominal wage gains. Yet the Middle East war has injected new uncertainty through energy and transport channels, compounding existing vulnerabilities such as low gas reserves and elevated petrol prices. Policymakers and markets will likely watch energy-price developments and consumption behaviour closely as risks to the growth outlook have risen.