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Key macro developments

After the challenging year 2020 and a steep decline in economic activity, the year 2021 showed strong economic recovery overall. Despite positive expectations due to a successful vaccination programme, the year ended somewhat disappointing with a strict lockdown. December 2021 saw a fifth wave of Covid-19 infections and a subsequent lockdown in the Netherlands, which was a clear demonstration that the Covid-19 crisis is not yet under control.

The key events and developments for the Dutch economy can be summarised as follows:

  • The Covid-19 pandemic continued to dominate the Dutch economy in 2021. Following the controlled lockdown initiated by the government, measures were eased over the summer and resulted in an increase in economic activity. However, new waves of Covid-19 variants flared up again during the last quarter of the year and once again resulted in new social restrictions, despite the availability of vaccines.

  • Dutch economic growth increased by 4.6% in 2021, with significant fluctuations during the course of the year. The economy contracted in Q1 due to the lockdown, but the remaining quarters saw a strong recovery. New contingency measures in Q4 prevented higher GDP growth. International trade and consumer spending were the major drivers of economic growth. By the end of the year, house prices were more than 20% higher than twelve months before, the highest year-on-year increase this century.

  • During the second half of the year, the energy crisis escalated, resulting in record high inflation rates with a record level of 5.7% in December 2021. This resulted in average inflation of 2.6% for 2021 as a whole. Energy prices increased by 60% year-on-year and remain volatile. Opposing views on the duration of this inflationary period are resulting in different policies by central banks with regards to raising interest rates. The ECB did not announce any interest rate shifts in 2021. Interest rates on 10-year Dutch government bonds were relatively stable and ended the year 20 basis points higher at -0.32%.

  • In 2021, consumer confidence recovered strongly from the negative impact of the Covid-19 pandemic. However, the energy crisis resulted in a heavy decline in consumer confidence later in the year. On the other hand, producer confidence ended the year at the highest level for the past 15 years, despite challenges in the supply chain market and high inflation rates.

  • The situation on the labour market tightened during the year, with shortages becoming visible in a wide range of industries.

  • Financial governmental support kept the number of bankruptcies at record low levels. Unemployment rates had fallen well below 3% by the end of the year.

  • A new cabinet was formed in the last weeks of the year after a record formation period. The new cabinet consists of the same four coalition partners as the previous one and will face the task of resolving a number of major challenges. Besides the Covid-19 pandemic, major focus points will be the climate and nitrogen crisis and the housing market. Furthermore, more funding will be allocated to education, justice and security.

  • The Russian invasion of Ukraine and rapidly escalating events in late February and in March 2022 are a significant tragedy for the people and causing disruption to business and economic activity in the region and worldwide.


2022 forecast







Consumer spending




Consumer price index (CPI)*




Government bond yields, long-term




Unemployment rate*





*Average number over the year


Source: Oxford Economics (4 February 2022)


More detailed information can be found in Bouwinvest's Market Outlook 2022-2024.