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Economic and political overview

Economic Overview

The Netherlands is the fifth-largest economic power in the Eurozone and the third-largest exporter of goods and services. The country is very open to trade and consequently to the global economic conjuncture. After economic stagnation in 2023 (+0.1%), real GDP growth in the first half of 2024 was volatile, mainly due to fluctuations in net trade, which shifted from strongly negative in Q1 to strongly positive in Q2. Following a contraction in the first half, private consumption in the second half of 2024 benefitted from strong real wage growth, with contractual wages rising above 6% and a tight labour market. Investment growth picked up modestly as financial conditions improved and public investment increased. Overall, GDP growth in 2024 was estimated at 0.6% by the IMF. Looking ahead, private consumption is expected to rise further, supported by solid wage growth, falling inflation, and tax cuts boosting households' real disposable incomes. The outlook for business investment and trade is also set to improve, driven by easing financial conditions and a better external environment. Real GDP is forecast to grow by 1.6% in 2025 and 1.8% in 2026.

According to CBS, government revenues and expenditures both rose by 7% in the first three quarters of 2024. Revenues increased by over EUR 24 billion, driven by a EUR 22 billion rise in premiums and taxes, while other revenues grew by nearly EUR 2 billion. Total expenditure also rose by nearly EUR 24 billion, with benefits and healthcare spending accounting for almost EUR 14 billion. In 2025, the budget deficit is expected to rise to 1.9%, partly due to a court ruling requiring tax refunds (impact: 0.5 pps) and income tax cuts in lower brackets. Higher public investment will further increase spending (EU Commission). Public debt amounted to 42.3% of GDP in 2023, although higher deficits are expected to raise the debt ratio to 45.1% in 2025 and 46.2% in 2026, remaining below the euro area average. The Netherlands' strong external position is driven by recurrent high current account surpluses and its role as a global trading hub. From 2020 to 2024, surpluses averaged 8.4% of GDP, reflecting high domestic savings. A multinational-dominated corporate sector with significant foreign assets supports a net international investment position of 54.1% of GDP in 2023 (Fitch Ratings). Statistics Netherlands (CBS) reported that consumer prices in the Netherlands rose by 3.3% in 2024, down from 3.8% in 2023, with housing and tobacco prices as the main drivers of inflation. For this year, the IMF forecasts inflation at 2.3%, followed by 2% in 2026.

The Netherlands presents a very high income per capita, which is distributed in a relatively equal manner. The GDP per capita is above the EU average and was estimated at USD 83,823 in 2024 (PPP – data IMF). The labour market remains strong, with low unemployment and more vacancies than job seekers. However, employment growth has slowed. As labour force growth outpaces weak job creation, unemployment is expected to rise slightly from 3.9% in 2024 to 4.2% in 2025 and 4.5% in 2026 (IMF).

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 1,154.691,218.401,272.961,325.691,372.99
GDP (Constant Prices, Annual % Change) 0.10.61.61.81.8
GDP per Capita (USD) 64,82967,98470,60673,10575,297
General Government Balance (in % of GDP) 0.1-1.1-2.3-2.7-2.9
General Government Gross Debt (in % of GDP) 45.044.345.146.247.2
Inflation Rate (%) 4.13.22.32.02.0
Unemployment Rate (% of the Labour Force) 3.63.94.24.54.7
Current Account (billions USD) 113.79121.87128.01133.24139.50
Current Account (in % of GDP) 9.910.010.110.110.2

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

The agricultural sector represents 1.7% of the country's GDP and employs 2% of the active population (World Bank, latest data available). This sector produces high yields, which is due in part to the intensive farming of arable land. Nearly 60% of the production is exported, either directly or through the food industry, making the Netherlands one of the largest exporters of agricultural products in the world: in 2023, agricultural goods exports were worth EUR 123.8 billion, representing a 1.6% increase compared to 2022. The main crops exported are cereals, potatoes and horticultural products. The Netherlands is also the largest flower exporter in the world. The number of companies active in the sector stands at 52,107 (Agricultural Census). According to the latest data by CBS, the Dutch agriculture sector's income rose by 5.1% in 2024 despite a 1.2% decline in production volume. Animal and crop production dropped by 0.7% and 1.4%, respectively. Higher output prices (+0.2%) and lower costs offset the decline, with total production value down 1% to EUR 41 billion.

Industrial activity generates around 18.7% of the Dutch GDP and employs 14% of the workforce. Among the main activities, there are the chemicals and petroleum sectors remain robust, with major players like Royal Dutch Shell fueling significant export revenues (the Netherlands is also one of the largest producers and distributors of oil and natural gas). Moreover, in high-tech industries, particularly semiconductor and microelectronics manufacturing led by ASML, Dutch companies are global market leaders. Food processing and engineering sectors also play key roles in sustaining the country’s industrial performance. The World Bank estimates that the manufacturing sector alone accounts for 11% of the country's GDP. Data by CBS show that, in December 2024, the calendar-adjusted output of the Dutch manufacturing sector dropped by 4.4%, marking 18 consecutive months without growth.

Services account for over 69.6% of national revenue and employ 84% of the workforce. The services sector is focused mainly on transportation, distribution, logistics, banking and insurance, water engineering and new technologies. The country is also Europe's leading service provider in ocean freight, which is not surprising as its economy largely depends upon exports. The Dutch banking sector is pivotal to the country's economy, with assets totalling EUR 2,700 billion—nearly three times the size of its GDP. The sector is highly concentrated, with the six largest banks holding around 85% of total assets (European Banking Federation). Tourism's contribution to the Dutch economy rose to 3.8% in 2023, up from 3.5% in 2022. Value added grew across all tourism-related sectors, with the industry's economic contribution reaching EUR 36.7 billion, a 9% increase from 2022 (adjusted for price changes) and nearing pre-pandemic 2019 levels (CBS). Concerning the retail sector, the total turnover rose by 2.1% in 2024, the lowest growth in a decade, with sales volume up 1.4%. Non-food shops grew by 3.9%, while food shops saw a 1.0% decline. Online turnover increased by 5.8%.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.9 14.1 84.0
Value Added (in % of GDP) 1.7 18.7 69.6
Value Added (Annual % Change) -1.7 -2.6 0.9

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

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Foreign Trade

Dutch prosperity has always been based on its international trade, and the geographic location of the country makes it a European trade hub, with Rotterdam being the largest European port and the third-largest in the world, handling over 465 million tons of cargo annually. With high-tech industries and services, foreign trade is one of the main pillars of the Dutch economy, representing an impressive 166% of GDP (World Bank – latest data available), one of the most open and outward-oriented economies in the world. According to data by CBS, 23% of exports in 2023 comprised machinery and equipment; followed by manufactured goods (20%), mineral fuels (18%), chemical products (16%), and food and beverages (13%).  The country is also a major exporter of flowers and plants, with the horticulture sector being a significant contributor to the Dutch economy. Most of the sales are re-exportations as the country plays the role of a European trade hub; therefore, the same product categories led imports (machinery, manufactured goods and mineral fuels accounted for 22% of imports each).

As data by CBS show, Germany was the main destination in 2023, accounting for 22.7% of total exports, followed by Belgium (11.6%), France (8.1%), the UK (6.3%), and the U.S. (5.1%). Imports came chiefly from Germany (16.8%), the U.S. (10.4%), Belgium (10.2%), China (8.4%), and the UK (5.1%). On 1 September 2023, new export control measures were introduced for advanced semiconductor manufacturing equipment, requiring national authorization for certain exports. These controls were expanded on 7 September 2024 to cover additional types of equipment.

The country has a structurally positive trade balance for goods and services, which stood at around 11.2% of GDP for 2023, according to the World Bank. After the unprecedentedly high import and export values registered in 2022 – which were due to an increase in energy prices – 2023 was also positive, with exports totalling USD 934.5 billion against USD 842 billion in imports. Concerning commercial services, exports stood at USD 316.9 billion (up by 10.1% y-o-y) and imports at USD 297.1 billion (+10% - data by WTO). According to the latest figures from the National Statistical Office, export volumes declined by 0.3% year-on-year in the first half of 2024, while imports fell by 2.5%.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 635,678595,122757,380897,485842,051
Exports of Goods (million USD) 708,596674,602840,032964,764934,568
Imports of Services (million USD) 265,608217,935248,990270,037297,137
Exports of Services (million USD) 275,933228,572261,658287,656316,893

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 160.7152.2163.2184.1165.9
Trade Balance (million USD) 71,51270,93576,86658,00991,987
Trade Balance (Including Service) (million USD) 92,57695,751102,68391,872128,905
Imports of Goods and Services (Annual % Change) 4.0-4.16.54.4-1.8
Exports of Goods and Services (Annual % Change) 2.8-3.86.94.4-0.5
Imports of Goods and Services (in % of GDP) 75.471.076.787.777.4
Exports of Goods and Services (in % of GDP) 85.381.286.596.488.5

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 0.42.43.43.43.2
Volume of imports of goods and services (Annual % change) 0.52.73.63.63.6

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
The Netherlands is a member of the following international economic organisations: IMF, European Union, ICC, WTO, G-10, OECD, among others. For the full list of economic and other international organisations in which participates the Netherlands click here. International organisation membership of the Netherlands is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by the Netherlands can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
Germany 22.7%
Belgium 11.7%
France 8.1%
United Kingdom 6.3%
United States 5.0%
See More Countries 46.2%
Main Suppliers
(% of Imports)		 2023
Germany 16.9%
United States 10.4%
Belgium 10.2%
China 8.3%
United Kingdom 5.1%
See More Countries 49.1%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
King: WILLEM-ALEXANDER (since 30 April 2013) - hereditary
Prime Minister: Dick SCHOOF (since 2 July 2024)
Next Election Dates
House of Representatives: May 2027
Senate: November 2027
Current Political Context
The Netherlands conducted unplanned early general elections on November 22, 2023, to choose the members of the House of Representatives. Originally scheduled for 2025, the snap election was prompted by the collapse of the fourth Rutte cabinet on July 7, 2023, attributed to differences over immigration policies among the coalition parties—namely, the liberal VVD, the liberal-centrist D66, the centre-right CDA, and the conservative CU. The coalition was the fourth in a row under the leadership of Rutte since 2010.
Geert Wilders' far-right Party for Freedom (PVV) doubled its seats to 37 and became the largest party in Parliament after obtaining a resounding victory in the general election. With 25 seats, the centrist New Social Contract (NSC) alliance took second place, followed by the socialist GL/PvdA alliance with 20. The former ruling parties, such as the VVD (24 seats, down 10), D66 (9, down 15), and CDA (5, down 10), all suffered significant losses. Wilders' anti-Islamic views prevented him from forming a coalition. Finally, in July 2024, a coalition of PVV, VVD, NSC, and BBB was established, with independent technocrat Dick Schoof serving as prime minister. Reducing immigration and reviewing environmental rules are among the top priorities for the government.
The European Parliament elections in June 2024 saw the GroenLinks-PvdA alliance emerge as the largest Dutch party, securing eight seats. The far-right PVV made significant gains, obtaining six seats. 
Main Political Parties
The Netherlands has a two-tier parliament divided into two chambers. The main parties/alliances represented in the parliament include:

- Party for Freedom (PVV): right-wing, nationalist, known for hard stands on immigration. The party, led by Geert Wilders, obtained 37 seats of the 150-seat parliament in the latest election, more than doubling their seats from the previous one
- GroenLinks–PvdA: alliance between the Greenleft (GL - centre-left, eco-socialist and anti-capitalist political party) and the Labour Party (PvdA - centre-left, social-democratic party)
- People’s Party for Freedom and Democracy (VVD): centre-right, based on free market ideas, liberal
- New Social Contract (NSC): centre to centre-right, Christian democracy. A new party that obtained 20 seats in the 2023 election
- Democrats 66 (D66): centre, progressive-liberal and radical-democratic political party
- Farmer–Citizen Movement (BBB): centre-right, agrarian, soft Euroscepticism
- Christian Democratic Appeal (CDA): centre, Christian democrats
- Socialist Party (SP): left-wing, extremely socialist
- DENK: centre-left, minority rights, identity politics
- Party For The Animals (PvdD): environmentalism, animal rights, soft-euroscepticsm
- Forum For Democracy (FvD): national conservatism
- Reformed Political Party (SGP): Christian right, social conservatism
- ChristianUnion (CU): centre, orthodox reformed political party with centre-left ideals
- Volt Netherlands (VOLT): centre, it is the Dutch branch of the political movement Volt Europa
- JA21: right to far right, conservative liberalism.
Executive Power
The Chief of State is the King, whose role is cerimonial. Following parliamentary (lower house) elections, the leader of the majority party or of a majority coalition is usually appointed Prime Minister (head of the Government) by the Monarch to serve a four year term. The Council of Ministers is formally appointed by the monarch on recommendation of the Prime Minister.
Legislative Power
Legislative power is bicameral. The parliament is called States General and consists of two chambers: the First Chamber (Senate - upper house, 75 members indirectly elected) and the Second Chamber (House of Representatives - lower house, 150 members directly elected). Members of both chambers serve a four-year term. The Government has the constitutional right to dissolve one or both chambers of parliament.
 

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