Economic growth is a measure of how well a country is doing. When the economy grows, production, earnings and investment also grow. This has an impact on jobs, wages and public finances. Here you can read about what economic growth means, it is measured and what factors play a role.
© ANP
A country’s economy grows when it adds more value through the production of goods and services during a given period than it did previously. This refers to the value adjusted for inflation, or the volume. We usually measure this growth on an annual basis and express it as a percentage.
Economic growth tends to lead to the creation of new jobs and higher incomes. The government collects more tax revenues and can spend more, for example on healthcare, education or defence. If growth stalls, jobs, public finances and investment will come under pressure.
The most important measure is GDP (gross domestic product): the total value of everything a country produces in a year. If GDP rises, the economy is growing. If GDP falls, the economy is contracting. GDP provides an indication of the size of the economy, but says less about overall prosperity, inequality or the environment.
GDP can also be measured by adding up all of a country’s expenditures. This includes exports and investment and consumption by businesses, households and the government:
The Netherlands has an open economy and many Dutch companies make their money abroad. Strong exports mean increased production, jobs and tax revenue. World trade and international uncertainty, such as trade tensions, therefore have a direct impact on our economic growth.
Investments in machinery and technology can boost productivity and encourage innovation. The economy then grows. When companies invest less – for example, due to uncertainty or high costs – innovation stagnates and growth slows down. The government also makes investments, for instance in new roads.
Household consumption is a key driver of the economy. When people spend more, demand for goods and services rises. Companies then sell more. In times of uncertainty or a decline in purchasing power, the opposite happens. Government spending such as on healthcare is also regarded as consumption. If that spending rises, economic growth will increase.
Economic growth influences – and is influenced by – various interrelated factors:
Economic growth affects prices. If demand for goods and services increases, inflation may rise. The prices of goods then rise more sharply, purchasing power falls and costs for businesses increase. This holds back consumption and investment. This is why central banks aim for an inflation rate of around 2%. At that rate, consumers continue to spend money and businesses are willing to invest. The economy continues to grow steadily.
We distinguish between nominal growth (including inflation) and real growth (excluding inflation).
Developments in the housing market are linked to household consumption. Rising house prices can boost consumption, as homeowners feel more prosperous. At the same time, high house prices make homes less affordable for first-time buyers, which limits their financial scope for spending. Households also tend to become cautious with their money when house prices fall.
The more people work, the more money they earn and spend. Both high unemployment and labour shortages can hamper growth. Productivity matters too: working more efficiently can drive growth without people having to work longer hours.
Government spending stimulates the economy, which in turn boosts demand for goods, services and labour. If supply cannot keep pace, inflation may go up. Sound public finances ensure stability and give households and businesses a sense of confidence, which is positive for growth.
Our economists monitor key economic developments and publish economic forecasts for the short and medium term. We publish these projections at various times throughout the year.
We publish the spring and autumn projections in June and December. These are our official forecasts for the Dutch economy, covering the current year and the next two years.
We use various tools to prepare our projections, including the DELFI economic model. We also use this model to assess the consequences of changes in economic policy or economic conditions. You can also check this yourself. You can find out, for example, what the consequences might be of higher energy prices or higher wages: Link to the DELFI model.
For short-term projections, we use:
26 March 2026
News
According to new figures from De Nederlandsche Bank (DNB), the total value of Dutch exports to the Middle East amounted to €47 billion in 2025, while imports totalled €21 billion. This means that the Netherlands’ trade with the region accounts for less than 5% of total Dutch imports and exports.
Read more The Netherlands has limited financial ties with the Middle East
24 March 2026
Press release
It is precisely in these uncertain times that we must strengthen the Dutch economy. And this requires a strong European Union that is more resilient and autonomous.
Read more Uncertain times call for a strong Netherlands and a strong Europe
24 March 2026
News
The war in the Middle East could cause inflation in the Netherlands to rise significantly, though less so than during the 2022 energy crisis. In a severe scenario, economic growth could slow down considerably. This is according to new calculations by De Nederlandsche Bank.
Read more War in the Middle East: the impact on the Dutch economy
05 March 2026
Background
Import tariffs seem like a reasonable way for a country to protect its economy. But do they really work in practice? How do import tariffs affect the economy of the country that imposes them and the countries that are subject to them, and how should a central bank respond?
Read more What do tariffs mean for the economy? Impact of import tariffs on prices, trade and growth