The Dutch economy is projected to grow by 2.7% in 2021 and 3.7% in 2022, reaching pre-crisis levels at the beginning of 2022. Consumption will drive the recovery as households normalise their saving after the sharp increase in 2020. Private investment will improve, but continue to be held back by lingering uncertainty. Bankruptcies are expected to rise and unemployment is set to peak in the second half of 2021 following the phasing out of support measures.
Fiscal policy should remain supportive until the recovery is well established, focussing on retraining and career counselling services to facilitate economic restructuring and ease job transitions. Public investment, supported by Next Generation EU recovery funds, should focus on accelerating the green transition to reach the country’s ambitious emission reduction goals and foster digitalisation. For the medium term, the government should carefully evaluate structural spending increases and design in advance a multi‑year fiscal plan to be implemented once the recovery is self-sustained to address emerging fiscal pressures from population ageing and related healthcare expenditures.