Inflation expected to stabilize at 2%, with room for wage increases
NL TimesAlthough inflation is currently very high, there is a good chance that it will stabilize at around 2 percent in the medium term. There is also room for wage increases without directly running the risk of a wage-price spiral, according to the Central Planning Office in an analysis of inflation development. If prices stop rising this year, the average inflation rate in the Netherlands, according to the European harmonized method, will already be 8.7 percent, the CPB said. The CPB Despite the high inflation, wages can rise in many cases without risking a wage-price spiral whereby companies continue to charge high wages in their prices, thus fueling new inflation. If companies and households think the economy will do less well in the coming years, inflation could also return to a stable level below 2 percent.
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