Dutch economy to grow in 2025, although with major regional differences
A forecast by Rabobank sees all Dutch regions economy growing next year. However, growth will not be evenly distributed.
Published on December 19, 2024
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In 2025, all Dutch regions are set to experience economic growth with no forecasted shrinkage, according to a report by Rabobank. Overall, Rabobank sees the Dutch economy growing steadily, with a 1.7% increase projected in 2025. Greater Amsterdam and Brainport Eindhoven are expected to lead with 3.5% and 3.3% growth rates, respectively. The analysis presents growth expectations for each of the Dutch regions and economic segments.
The service sector, particularly information and communication, is poised for robust growth, projected at 4%. The specialist business sector, driven by the increasing demand for accountants, is also poised to increase by 3.3%, as both sectors keep their positive trend.
Trade will grow by 2.5% as a surge in consumption and exports is expected. The construction sector will also bounce back after a contraction year (+1.5%), similar to the industry, which will experience a 1.8% hike. Due to a rise in the costs of energy and raw materials, combined with new measures to contain nitrogen emissions, agriculture will shrink by 1.4%.
Regional differences
The different growth paces of economic sectors also resonate with regional growth. Greater Amsterdam and Brainport Eindhoven will once again outperform the average national growth rate, thanks to the proximity of knowledge institutions, collaborating companies, and a highly skilled workforce. The service sector is driving Amsterdam's growth, while high-tech manufacturing is behind Eindhoven's expansion.
Similarly to Amsterdam, Utrecht will experience growth thanks to a strong service sector. Twente's economic structure also resembles Eindhoven's, with growth driven by the high-tech sector.
Rabobank also expects South East Friesland, South East South Holland, and South West Drente to outperform the national average. The available space for businesses and the innovative power of some companies will drive South East Friesland forward, and the construction sector's recovery will push South East South Holland's growth.
No region will see a contraction, but coast regions and northern ones will keep lagging behind. Behind these reduced growth expectations are the less favorable regional circumstances.
Dutch economy growth map for 2025 - © RaboResearch
The potential impact of US import tariffs
Rabobank's analysis also delved into the potential impact of the import tariffs announced by newly elected United States president Donald Trump. The US is the Netherlands' second-largest trading partner. The research considered province data.
North Brabant is the largest exporter, excluding re-exports, mainly through Schiphol's airport and Rotterdam's port. According to Rabobank, 43% of Dutch exports to the US is machinery and transport equipment, critical sectors in the provinces of North Holland and North Brabant. Mineral fuels from South Holland and chemicals (from Limburg and Zeeland) follow suit.
The bank highlights that if import duties are confirmed, North Brabant, Zeeland, Limburg and Overijssel might be the most vulnerable regions. Given that a small number of companies are responsible for a large volume of exports, the impact of the measure might affect all their local supply chain, too.
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