Inflation in the Netherlands is set to rise sharply next year as the ongoing economic boom finally starts to drive up wages, the Dutch central bank DNB said on Monday. The euro zone's fifth largest economy is already in its fourth consecutive year of above average growth and is expected to continue that run at least until 2020, the central bank said.
So far, the strong rebound after the recessions of 2009 and 2013 has not translated into markedly higher wages. But that is about to change, according to DNB's new projections. "The economy is booming", DNB director Job Swank told reporters. "Companies in a growing number of sectors have problems finding workers and we expect this to lead to a significant rise in wages."
Economic growth is seen at 2.5 percent this year, slowing down to 2.2 percent in 2019 and 1.9 percent the year after, DNB said. In 2017, growth was at 3.3 percent, a high for the decade. Growth of disposable incomes is expected to accelerate from 2.6 percent this year to 3.5 percent in 2020.
This will help inflation rise from 1.1 to 2.5 percent next year, DNB said, reaching the highest level since 2013.
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