Group Economics writes regularly about developments in the macro economy. Here are our latest forecasts on interest rate and currency developments, energy prices and the economic trend in developed and emerging markets.

The tariff shock is unfolding more gradually, with a milder but more prolonged growth hit. The impact is also blunted by solid consumption, helped by falling rates and benign inflation. The ECB is now expected to look through the undershoot of its 2% inflation target. This means no further rate cuts on our forecast horizon, and the deposit rate holding at 2% for the foreseeable future.

Q2 GDP came in at 0.1% q/q, roughly in line with our expectations (0.2% q/q), leading to small tweaks to our annual forecast of 1.5% in 2025 (from 1.6%) and 1.1% in 2026 (from 1.3%). Tariffs will weigh on activity in the near term, directly and indirectly via main trading partners. 2026 growth benefits from rate cuts, solid demand and fiscal spending in main trading partner Germany. After summer, it is all eyes on the Hague, with the caretaker government presenting the 2026 budget, and the election campaign ahead of the 29 October elections.

The US economy slowed sharply in the first half of this year, only held up by the AI boom. Consumption has slowed down and the consumer is under increasing pressure. Private demand has all but stalled, with two thirds of growth coming from investment in data centers.

Q2 GDP data showed a remarkable resilience, with exports holding up despite tariff war … but recent activity data confirm domestic imbalances, and weakening growth momentum. Beijing focuses on ‘excessive competition’; additional demand support still likely.

Considering the surge in renewable capacity to meet climate goals, a new challenge is facing power market operators, namely grid balancing. This is because of the intermittent nature of renewable generation, which makes supply vulnerable to weather conditions, especially in the absence of sufficient grid and flexible capacity. In such a case, curtailment and negative prices episodes become more frequent, along with frequency swings, which induces blackouts and economic costs. Furthermore, such situation would discourage investments and slowdown the transition process. The recent nation-wide blackout in Spain and Portugal put this challenge in the spotlight raising concerns about energy stability and security across Europe. This article dive into this topic with a focus on the Dutch case. We revisit the current and envisioned power mix in the Netherlands. We further explore the challenges, risks and opportunities facing development of flexible technologies in the Netherlands. We end with recommendations.

The ECB has recently announced a change to its collateral framework. From the second half of 2026, haircuts to non-financial institutions’ bonds will be adjusted by a climate factor. The latter will serve as a buffer, mitigating the potential financial impact of climate-related uncertainties on collateral value and is calculated based on a sector-specific stressor, an issuer-specific exposure and an asset-specific vulnerability.

There was a noticeable surge in negative news related to ESG in the first half of the year, which has impacted the issuance of ESG-labelled bonds. Initially, we expected ESG issuance to total EUR 266bn in 2025, but we have adjusted our forecast down to EUR 247bn. In the financials space, that downward revision stems from less ESG-labelled senior non-preferred bonds in Q2. With regards to corporates, the issuance of ESG-labelled bonds by utilities’ companies has also fallen short of our forecast, and we now expect it to total EUR ~50bn by year-end. And, finally, concerning sovereigns, we are also downward revising our forecast for NextGenerationEU issuance in EUR 3bn, in line with the trend registered in the first half of the year.

Europe is striving to do its part in the effort to limit global warming. The first hurdle on the road to meeting the target of net zero GHG emissions by 2050 is meeting the EU climate and energy targets for 2030. The next hurdle is setting new intermediate targets for 2040. It is likely that chances of successfully setting a credible and sufficient 2040 target are influenced by the chances of meeting the 2030 target, as climate action will have to be stepped up during the period 2030-2040 in case the 2030 targets were missed. This note focuses on the probabilities of meeting the 2030 targets, based on the European Commission’s evaluation of the latest National Energy and Climate Plans (NECPs) of the individual Member States.

According to the Universal Declaration of Human Rights, everyone has the right to housing, regardless of their employment status, health, or other conditions. In this note we dive deeper into the structures of social housing in four European countries: the Netherlands, United Kingdom, Germany and France.

There is a strong likelihood that global demand for low-carbon technologies (also known as ‘clean tech’) will continue to grow in the coming years. In Europe, growth in demand for clean technologies will be driven mainly by the need to meet climate targets. It is therefore important not only to expand production capacity for clean technologies on the European continent, but above all to ensure that trade flows in clean technologies remain open and accessible. Understanding global trade flows in clean technologies and market developments in this segment is important for both businesses and policymakers involved in the energy transition. It helps to identify potential risks and opportunities. In this publication, we examine the main trends in trade flows of clean technologies in the EU-27. We not only highlight the ratios of imports and exports of clean technologies in the EU-27, but also show which countries are the most important trading partners for the EU-27. We note that there are significant differences between EU Member States in terms of trade in clean technologies and that only a handful of countries make a difference in this regard. Finally, we discuss the growth of trade in clean technologies. The data show that since 2017, trade in clean technologies has grown much more strongly than total trade in goods in the EU-27. We end this note with a conclusion.

Investments in the defence sector are projected to rise in the coming years due to growing geopolitical concerns. Given that public investment alone is insufficient to meet the sector's needs, private investors are expected to ramp up their defence-related investments. However, this prompts several questions regarding which funds could participate, especially considering the social implications of this issue. Therefore, in this note, we explore which funds are currently investing in defence, assess whether legislation permits both ESG and non-ESG funds to invest in defence-related companies, and provide a comprehensive evaluation of the involvement of ESG funds, particularly Article 9 funds, in defence-related investments.

The fight against global warming and severe weather impacts requires a global shift from fossil-fueled economic activities to a clean energy-powered and energy-efficient economy. This transition towards achieving Net Zero emissions has significant economic implications. These implications become more apparent when examining specific components of GDP rather than just the overall macroeconomic numbers. Research and models consistently indicate that the negative economic impact of physical risks in a "hot house world" scenario is far greater and more permanent than any potential negative effects of transitioning, even if the transition is disorderly. Thus, there is a strong economic incentive to mitigate global warming as much as possible. This note explores the key transmission mechanisms of transition risk into the economy, aiming to clarify its effects on different parts of the economy.

The United Nations Environment Programme (UNEP) characterizes nature-based solutions (NbS) as “initiatives designed to protect, conserve, restore, and sustainably manage ecosystems”. Examples of these solutions include ecosystem restoration, urban green spaces, and sustainable land management. In the EU, the integration of nature-based solutions across diverse landscapes is deemed crucial for fulfilling the ecosystem restoration objectives outlined in the EU Biodiversity Strategy for 2030. Additionally, NbS are considered vital for achieving climate change mitigation goals. Since the establishment of the Global Biodiversity Framework in Montreal in December 2022, there has been a slight increase in financial inflows towards nature preservation and restoration. Nevertheless, these remain substantially below the trajectory required to meet the targets set in Montreal. For the first time, the report identifies that there are USD 7 trillion of financial flows (public and private) that finance activities that have a negative impact on nature. These activities include price incentives and fiscal transfers to the agriculture sector, consumption subsidies for fossil fuels, and support for fishing capacity that exceeds the maximum sustainable yield of fish stocks. These figures could potentially be underestimated as they account only for direct impacts. Despite the substantial investment potential of NbS, the most effective measure to halt and reverse nature loss is the redirection of nature-negative financial flows. While increased public finance for NbS is crucial, more efforts would also be need to repurpose harmful subsidies if biodiversity goals are to be met. Simultaneously, governments would need to establish regulations and economic incentives to redirect private financial flows away from activities that are harmful to nature and towards nature-based solutions. In this note, we aim to explore the state of NbS, examine their financing trends over recent years, and discuss strategies to enhance investment in nature.

This publication focuses on three factors that increase production costs: energy prices, environmental taxes on gas and electricity, and the CO2 levy. First, we examine the trend in margins for highly energy-intensive companies and industrial companies that are less energy-intensive. We also look at the impact of fossil energy consumption versus energy prices. Next, we examine environmental taxes – including in an international context – and the impact of the CO2 levy on Dutch industry. Finally, we look at deindustrialisation in the Netherlands and the extent to which this has already become a reality. We also investigate how the government's announced relief measures could affect the sustainability of the sector. We will end this note with a conclusion. (Photo by Mario Caruso on Unsplash)

The Carbon Border Adjustment Mechanism (CBAM) is integral to the EU Green Deal, designed to level the playing field for domestic and foreign producers while minimizing carbon leakage. The European Commission's Omnibus proposal offers simplifications to ease administrative burdens, ensuring most emissions remain covered.

In this publication, we answer the question of what the path of the Dutch economy and its sectors towards the ultimate 2050 climate-neutral goal might look like. In particular, we look here at the impact that low-carbon technologies can have on reducing greenhouse gases for 21 sectors in our so-called Sector Technology Pathways. What sectors are the heavyweights in the transition, where is reducing greenhouse gases most challenging and what are bottlenecks we need to overcome in the transition?

Climate change creates greater risks that are more frequent and cause more damage to Dutch homes. This study addresses the question of which districts can be deemed ‘climate-vulnerable districts’, i.e. those in which the risks of climate change, but also the costs of energy efficiency measures, may be too much for homeowners or properties to bear.

The energy transition is an economy wide process where a development in one part affects, directly or indirectly, other parts. Bottlenecks or costs challenges could harm an effective energy transition. The effect of today’s bottlenecks on the transition, such as the limited grid capacity, is magnified because of the mismatch in the timeframe for deploying grid extensions versus what is needed for electrification or renewable deployments.

The Rhine, the busiest river in Europe, is of great economic importance. Due to drought, both in 2018 and 2022, there have been episodes where the water level in the Rhine has dropped to critical levels, severely limiting inland shipping. According to the Kiel Institute for the World Economy, in November 2018, low water levels led to a drop in industrial production by 1.5 percent, causing a decline of German GDP by 0.4 percent. 1)

Biodiversity stands for biological diversity. The loss of biodiversity translates into the loss of services provided by ecosystems to the real economy. There are two types of risks associated with biodiversity: physical and transitions risks. Physical risks stem from the loss of biodiversity (for instance, disappearance of animal pollinators, like bees), and transition risks stem from regulations/policies introduced by regulators to mitigate biodiversity loss (such as the introduction of a tax on fertilizers or the implementation of Natura 2000). Physical risks are captured by how much a sector depends on biodiversity (e.g. agriculture depends a lot on animal pollinators, like bees). And transition risks are captured by how much a sector impacts biodiversity (i.e. the more damage a firm causes, the more likely it is to be hit by policies acting against it). The ENCORE database provides qualitative assessments for each sector and sub-sector on their exposure to biodiversity risks and we use these to calculate quantitative biodiversity sector exposure scores. As per existing regulation, banks are required to report their loan book exposure per sector, according to the NACE categorisation. Hence, by combining banks’ loan book exposure per sector and sector scores on biodiversity dependence and impact, we were able to calculate individual banks’ exposure to biodiversity loss risks. Furthermore, we used Natural Language Processing to assess a bank’s awareness of its balance sheet exposure to biodiversity risks.

Jaap Teerhuis is a Senior Fixed Income Strategist at Group Economics of ABN AMRO Bank

Larissa Fritz is a Senior Fixed Income Strategist, with focus on ESG at Group Economics of ABN AMRO Bank.

Jan-Paul van de Kerke is Senior Economist covering the Netherlands and the eurozone at Group Economics of ABN AMRO Bank.