Dutch inflation higher than eurozone as prices stay high despite slower wage growth

Dutch inflation continues to outpace the eurozone average, reaching around 3 percent compared with roughly 2 percent across the bloc, De Nederlandsche Bank (DNB) President Olaf Sleijpen said Thursday. He attributed the persistent price increases to broad shortages affecting space, labor, and energy infrastructure, rather than solely to wages or fuel costs.

Speaking at the International Monetary Fund annual meeting in Washington, Sleijpen noted that inflation in the Netherlands ticked up again in September. “We have a very tight labor market. The scarcity is around the use of space, but also in things like nitrogen permits. Scarcity is also in the fact that companies have to wait a long time for an energy connection,” he said. “A lot of extra costs can ultimately be traced back to tightness and scarcity. We are, of course, also a small country.”

Sleijpen urged the new Dutch cabinet to address these shortages to help reduce inflation. “Make it easier to produce goods in the Netherlands,” he advised. “That can happen if it becomes easier to hire people, if there are fewer rules, or if it is easier to build a factory. Then prices will also go down.”

The DNB president also recommended policies encouraging part-time workers to increase their hours, which could ease labor market pressure.

He highlighted the importance of completing the European single market, the capital markets union, and the banking union in Brussels, arguing that such measures would help start-ups secure financing and scale up productivity-enhancing innovations.

Sleijpen predicted that addressing these structural shortages would gradually bring inflation down. He noted that wage growth is already slowing, though he cautioned, “But that may take some time.”