9.4% inflation expected for Netherlands in 2022
The average inflation in the Netherlands will be 9.4 percent this year, the European Commission expects. In May, Brussels estimated the inflation rate at 7.4 percent. The average expected for the nineteen euro countries is also higher at 7.6 percent, compared to 6.1 percent expected two months ago.
The Commission is also lowering its economic growth forecast for the Netherlands in 2022 from 3.3 percent in May to 3 percent. That is slightly better than the average in the eurozone (2.6 percent).
Next year, the consequences of the war in Ukraine will cut deeper into the Netherlands. According to the daily management of the EU, inflation will drop to an annual average of 3.3 percent, but economic growth will remain limited to 1 percent. The Commission estimates inflation in 2023 at 4 percent for all euro countries and adjusted economic growth downwards, from 2.3 percent in May to 1.4 percent now.
The uncertainties caused by the Russian invasion of Ukraine about, for example, gas deliveries this winter and rising energy and food prices make forecasting difficult, the European Commission acknowledged in its annual summer forecast. There are still problems worldwide with deliveries of all kinds of goods and raw materials. The longer this situation lasts, the greater the risk of unrest in the financial markets, according to the committee. In addition, there is a risk of a possible revival of the coronavirus pandemic, with adverse economic consequences, it warned.
All in all, the Commission paints a bleak picture of economic developments, although it continues to reiterate that the eurozone is strong.
Strong countries like Germany and France cannot escape rising inflation, which erodes citizens’ purchasing power, said European Commissioner Paolo Gentiloni (Economics). “Russia’s invasion continues to send shockwaves through the global economy. Moscow’s actions are disrupting energy and grain supplies, pushing up prices, and weakening confidence,” the Italian said at the presentation of the estimates in Brussels. “That is why we have adjusted our expectations, especially for 2023.”
To navigate the turbulent waters, the EU needs to show leadership, Gentiloni said, around the keywords “solidarity, sustainability, and security.”
Reporting by ANP