Dutch CPB cuts 2026 purchasing power forecast to 0.6%, projects 0.3% decline for 2027

CPB cuts purchasing power forecast

The Centraal Planbureau (CPB) published its Macro-Economische Verkenningen on Friday, August 14, revising its 2026 purchasing power forecast from 1.4% growth predicted in March to just 0.6%. For 2027, the CPB projects a 0.3% decline in purchasing power if government policy remains unchanged. The figures serve as the starting point for budget negotiations ahead of Prinsjesdag on September 15, when the minority Jetten cabinet presents its first budget. The government will need opposition support to secure a parliamentary majority for its spending plans. A formal deadline for submitting plans to the Raad van State falls at the end of August. The parliament is traditionally sensitive to purchasing power declines, but the relatively small 0.3% drop for 2027 reduces pressure on the cabinet to intervene.

Inflation and energy prices

The downward revision stems from higher inflation, driven by rising fuel and energy prices caused by the war in Iran and the closure of the Strait of Hormuz. Inflation is expected to hover around 3% in both 2026 and 2027, with price increases exceeding 6% over the two years combined. The war in Ukraine also contributes to elevated energy prices, which the CPB expects to remain high for an extended period regardless of how the conflicts resolve. A summer drought could further push inflation upward through crop failures, the bureau notes. The inflation level has not yet reached that of the 2022 energy crisis.

Impact across households

Middle incomes are hit hardest in 2027, losing between 0.2% and 0.4% of purchasing power. Pensioners fare better than average, with their disposable income growing faster. Low incomes are relatively protected in 2026 thanks to the Noodfonds Energie. The number of people below the poverty line declined since 2024 by over 90,000 to 460,000, and decreases further in 2026 due to higher benefits and expanded rent subsidies. For 2027, the CPB expects poverty to rise to 470,000, though NRC reports the number remaining roughly stable.

Tax burden and defense spending

The 2027 decline is compounded by tax increases the cabinet introduced to fund higher defense spending. Citizens will pay a so-called "vrijheidsbijdrage" of €1.5 billion to the treasury. Employers will also pay higher premiums for disability insurance, reducing net wages. While wages continue to rise in 2027, the CPB says the increases will not offset price rises and the heavier tax burden for most households. An earlier proposal to lower fuel excise taxes was discussed earlier this year but not implemented.

Resilient economy despite risks

Despite global tensions, the CPB expects GDP growth of 1.4% in 2026 and 1.2% in 2027, with the 2027 figure slightly revised upward. Export remains strong, with the machine industry benefiting from chip-sector demand driven by AI. Household consumption continues to rise as Dutch households draw on savings buffers built during the COVID pandemic. Government spending, including on defense, further supports growth. The CPB warns of downside risks including import tariffs, financial market unrest, and further energy price increases. If AI investments fall back, export growth could weaken.

De Nederlandse economie is veerkrachtig.

CPB director Pieter Hasekamp advised against generic purchasing power support measures, recommending instead investment in sustainability for vulnerable households.

Investeren in verduurzaming, met aandacht voor kwetsbare huishoudens, is effectiever en toekomstbestendiger.