Netherlands

Stable but weakening GDP growth, supported by solid fundamentals and public investment

The economic outlook for the Netherlands in 2026 and 2027 is expected to be more subdued, after generally outperforming its European peers since the pandemic. Household consumption, which has been a key driver of growth – with real consumption expanding by around 1.7% in 2025 – appears set to lose momentum. A gradual rise in unemployment, while still expected to remain at manageable levels by historical standards, alongside a slowdown in employment growth, is likely to weigh on consumer confidence. These labour market developments, combined with renewed price pressures, are expected to erode real purchasing power and dampen consumer sentiment. Higher interest rates are also likely to increasingly constrain discretionary spending, particularly for interest sensitive items. Government measures aimed at supporting household incomes should partially mitigate these headwinds, while rising public expenditure and continued investment – most notably in defence – will provide some counterweight. Nevertheless, overall domestic demand growth is expected to moderate.

The outlook for private investment is similarly clouded by a more uncertain economic environment. Higher energy prices, elevated financing costs and a gradual easing in corporate operating profits seen in recent years are expected to weigh on private investment decisions. As cost pressures intensify, corporate margins are likely to come under renewed strain, contributing to an increase in insolvencies after they returned to pre-pandemic levels in 2025. This deterioration is expected to be uneven across sectors, with the impact concentrated in more vulnerable segments that are highly exposed to interest rate sensitivity and rising input and energy costs. The construction sector stands out in this respect. While civil engineering activity and public investment – particularly in grid expansion and other infrastructure related to the energy transition—should provide some cushioning, the sector continues to face elevated material and labour costs, weaker demand and the adverse effects of higher interest rates on both project financing and housing affordability. As a result, conditions in construction are likely to be challenging through 2026 and into 2027.

The external environment provides limited additional support to growth. The trade outlook for 2026 and 2027 remains challenging, as European and global trade growth is constrained by a broader economic slowdown. In addition, the gradual impact of US tariffs is expected to weigh on international trade flows, even though the Netherlands is less directly exposed than some other highly open European economies. Despite these headwinds, export performance should continue to benefit from the strong positioning of the Netherlands in high value added sectors. In particular, robust demand for IT equipment and the country’s deep integration into global semiconductor and AI related value chains are expected to remain important sources of resilience. These sectors should help offset weaker performance in more cyclical areas of trade, allowing exports to make a modest but stabilising contribution to growth over the medium term.

Public deficit will widen again but remain within Maastricht thresholds

The public deficit is expected to remain elevated over the medium term. After widening further in 2024 and peaking in 2025 – its highest level in more than a decade outside of the pandemic – the fiscal balance is set to deteriorate again in 2026 before narrowing somewhat in 2027. Despite this trajectory, the Netherlands continues to be viewed as fiscally prudent, with both the deficit and public debt remaining within the Maastricht thresholds. The temporary widening in 2026 reflects the combination of structurally lower revenues following tax cuts targeted at lower income households and gradually rising expenditure. Government spending is expected to continue increasing over the forecast horizon, driven by sustained commitments to defence alongside steadily rising social security and healthcare costs. As some temporary pressures ease and revenue measures gain traction, fiscal consolidation should resume in 2027, albeit at a gradual pace.

The Dutch current account surplus is expected to strengthen further in both 2026 and 2027. Although narrowing slightly, the current account balance stood around 8% of GDP in 2025 – supported by goods trade surplus and a stronger services surplus – the external position is set to remain solid over the medium term. While the primary income balance had weakened in recent years due to the high-interest rate environment, lower financing costs are expected to contribute to a gradual improvement in this component. Although uncertainty remains regarding the potential impact of renewed US trade restrictions on goods exports, this is likely to be partly offset by improving primary income flows. As a result, the current account surplus is expected to increase slightly but persistently over the 2026–27 horizon, reinforcing the Netherlands’ strong external position.

New centrist government coalition on unstable ground in the Netherlands

The October 2025 general election resulted in a fragmented outcome, with the centrist, social-liberal D66 emerging as the largest party with 17% of the vote, narrowly ahead of the far-right Party for Freedom (PVV) led by Geert Wilders. The election was triggered after the previous government collapsed in mid?2025 amid disagreements over asylum policy. Following extended negotiations, D66 formed a minority coalition government in January 2026 together with the conservative-liberal VVD and the Christian-democratic CDA, securing 66 seats in the 150 seat Tweede Kamer, requiring external support for most legislation – a relatively uncommon arrangement in the Dutch political system. The resulting coalition is generally characterised as centrist to centre-right.

The government has committed to maintaining a prudent fiscal stance, but policy priorities point to a gradual increase in public spending. In particular, defence and housing investment are set to rise, alongside efforts to reform the agricultural sector, including potential farm buyout schemes. To help finance these initiatives, the coalition has announced plans to raise taxes, including higher levies on both personal and corporate income, while also signaling cuts to healthcare and social security spending (mainly through higher personal contributions). Recent announcements of additional energy-related support measures – amounting to around EUR 1 billion – in response to disruptions linked to the higher energy prices caused by the escalation of the Iran–US–Israel conflict underscore the government’s intention to preserve sufficient fiscal space to respond to crises when needed.

As a minority government, the coalition faces significant political constraints. The need to secure ad-hoc parliamentary majorities from opposition parties is expected to complicate the passage of key legislation, particularly more politically sensitive measures such as spending cuts and structural reforms. Uncertainty therefore remains as to whether the government will be able to assemble sufficient support by autumn 2026 to implement its full policy agenda. These constraints are likely to limit the pace and scope of reforms over the forecast horizon. The next general election is scheduled to be held by 2030, suggesting that political fragmentation may remain a structural feature of the Dutch political landscape in the coming years.

Payment

In the Netherlands, bank transfers are by far the most common payment method for both domestic and export business-to-business transactions. All Dutch banks are linked to the SWIFT electronic network, which provides low-cost, flexible and rapid processing of international payments. Direct debit and different centralised local cashing systems are also widely used. Online sales are increasingly popular and most companies now use digital banking software. Cash payments are gradually disappearing and other payment methods, like cheques and bills of exchange are rarely used.

Debt Collection

Amicable phase

A debt collection process usually begins and ends by sending the debtor a (sometimes registered) collection letter. Sending letters (only) by email is becoming more and more customary. Besides the principal claim amount, the collection letter usually also includes a demand to pay accrued interest and extrajudicial costs. If the interest rates and/or costs have not been agreed by contract, Dutch law regulates the limits for both. If amicable actions, which include reminders by phone and possibly a debtor visit, do not result in full payment, the creditor can initiate legal action, in accordance with Dutch civil law.

LEGAL PROCESS

Fast-track procedures

In urgent cases, claims can be submitted for a fast track procedure (kort geding). These proceedings resemble those of the regular civil court but, if convinced of the plaintiff’s arguments, the judge (ruled by the President of the district court) delivers a verdict within a very short period of time – usually between two to four weeks. During this somewhat simplified procedure, the judge often makes a temporary or provisional ruling for more urgent matters. If, subsequent to this provisional decision, the parties do not reach a final settlement on all issues, they then need to obtain a final judgement in a “regular” civil suit (bodemprocedure).

The fast track procedure in the Netherlands differs from the (European) payment order procedure used in many other European states. It always requires the assistance of a lawyer and personal appearances by all parties before the judge. As this makes the fast track procedure rather expensive, it is not often used in regular collection cases.

Ordinary proceedings

The regular civil court procedure, held in one of the eleven district courts (Rechtbank), is the most frequently used recourse of action. Claims of €25,000 or less are heard by a judge of the cantonal sector of the district court (kantonrechter), while claims in excess of €25,000 are presented before the civil law sector. The main difference in the civil law sector is that both the plaintiff and the debtor have to be represented by a lawyer, whereas in the cantonal sector parties are permitted to argue their own cases. Both types of procedures begin with a bailiff serving the debtor with a writ of summons. In many cases, debtors do not contest the claim or appear in court. This results in a judgment by default being given, usually within six to eight weeks. If the debtor does appear in court, the judge sets a date for them or their lawyer to prepare a written statement of defence (conclusie van antwoord). However, when appearing before a cantonal sector judge, debtors can represent themselves and plead their cases verbally. After the first plea, it is standard procedure for the judge to schedule personal appearances by both parties to obtain more information and to see if a settlement is possible (comparitie van partijen). If not, the court can either pass judgement immediately or, in more complex cases, give the plaintiff the opportunity to deliver a replication (conclusie van repliek). The defendant can then reply by rejoinder (conclusie van dupliek). These proceedings take, on average, six to twelve months.

Winding-up proceedings

A third and often effective procedure for collecting payments is by filing a winding-up petition at the district court. This type of petition must be filed by a lawyer and the applicant needs to submit evidence of a payment default on an undisputed debt and of the existence of at least one other creditor having an undisputed claim of any kind (for example, commercial debt, outstanding alimony or taxes). The debtor is then formally notified by a bailiff that a winding-up petition has been filed. To avoid bankruptcy, the debtor can choose to appear in court to dispute the claim (or the fact that there are other creditors) or propose an out of court settlement. As most debtors try to reach a settlement, these proceedings are often cancelled before the date of the court hearing. Otherwise, and if there is sufficient evidence, the debtor is then declared bankrupt. Approximately 95% of all bankruptcies result in no payment being received by non-preferential creditors.

Retention of title and right of reclamation

Besides initiating legal action or claiming retention of title (if stipulated), sellers of goods can often exercise their right of reclamation (recht van reclame) for unpaid goods. This entails sending the debtor a registered letter which invokes this right. The contract is thus terminated and by law, ownership of the goods returns to the creditor. However, this recourse of action does require the goods to be in their original state. The registered letter must be sent within 6 weeks of the claim being due and within 60 days of the goods being delivered. 

Enforcement of a Legal Decision

If a debtor does not voluntarily comply with a court decision, the creditor can initiate actions to enforce the judge’s ruling. As most court decisions become effective immediately, creditors do not need to wait for the three month period of appeal to expire. Enforcement laws lay down statutory rules on coercive measures and how these measures can be applied. In the Netherlands, only bailiffs are authorised to levy enforcements and are instructed by the creditor. Two conditions need to be met before coercive measures begin. The bailiff must be in possession of a writ of execution (an original and enforceable judgment) and the party on which the enforcement will be levied must have prior official notification of the writ.

Court decisions rendered by other EU countries benefit from specific enforcement mechanisms, including the EU payment Order and the European Small Claims procedure. Decisions issued by non-EU countries can be recognised and enforced on a reciprocal basis, provided that the issuing country is part of a bilateral or multilateral agreement with the Netherlands. In the absence of such an agreement, an exequatur procedure can be carried out in the Dutch?courts. 

Insolvency Proceedings

RESTRUCTURING PROCEEDINGS

Corporate debt restructuring entails using the suspension of payments (surseance van betaling) procedure. The debtor is granted temporary relief from creditors, in order to allow them to reorganise, continue with business operations and ultimately satisfy their creditors’ claims, all under the supervision of a court-appointed administrator. A plan is proposed and must be approved by two-thirds of the creditors representing three-quarters of the total outstanding?debt.

BANKRUPTCY PROCEEDINGS

The debtor’s assets are liquidated by the court-appointed trustee. This procedure commences when the debtor has ceased payments and the District court has declared the debtor bankrupt. If a creditor makes a request for the debtor to be declared bankrupt, there must be at least two creditors with overdue claims. However, when liquidation is requested by the debtor, evidence of additional creditors is not mandatory.

The trustee establishes a list of creditors, the debtor’s assets are auctioned and the proceeds then distributed between the creditors.

Last updated: May 2026