AMSTERDAM (Reuters) -Trade tariffs and the uncertainty they are causing put a brake on economic growth in the Netherlands, the Dutch central bank DNB said on Friday. Growth of the euro zone's fifth
Dutch Central Bank Warns of Economic Slowdown Due to Trade Tariffs
AMSTERDAM (Reuters) -Trade tariffs and the uncertainty they are causing put a brake on economic growth in the Netherlands, the Dutch central bank DNB said on Friday.
Growth of the euro zone's fifth largest economy is set to remain stuck at about 1% from this year through 2027, DNB said, revising down its previous outlook of 1.5% growth for 2025 and 2026.
The bank said its outlook was based on current U.S. trade tariffs of about 10% on most foreign goods, with no countermeasures imposed by the European Union.
But DNB said uncertainty was unusually large, and presented two alternative scenarios for trade tariffs and their impact.
In case of a full-blown trade war, in which the U.S. imposes the temporarily suspended tariffs announced on April 2 and the rest of the world responds with comparable measures, growth would basically disappear next year and only gradually recover in 2027.
A mild scenario, in which the U.S. and EU later this year agree to remove all tariffs, would add about 0.3 percentage points to growth compared to the baseline outlook, DNB said.
Inflation in the Netherlands is expected to drop to 3% this year, down from 3.2% last year and to further slow to 2.6% in 2026 and 2027.
A trade war would take Dutch inflation down to 2% by 2027, DNB said, due to waning demand.
(Reporting by Bart Meijer, Editing by William Maclean)
