AMSTERDAM (Reuters – The Dutch central bank (DNB), said Monday that inflation in the Netherlands would remain high through at least 2023 because of a shortage of labour during an economic boom.

The DNB stated that inflation in the fifth largest economy in the Euro zone is expected to be 3.0% by 2022 and 2.9% by 2023. This comes after an increase in energy prices, which pushed up average consumer prices by 2.7% this year.

According to the DNB, inflation will rise due to higher wages and a tight labor market.

The central bank stated that “but for the moment, we don’t see undesirable levels in wage inflation”. Wages are likely to increase by an average 2.5% over the next two-years.

Last week, the European Central Bank (ECB), stated that inflation would drop slightly to below 2% in the Euro zone by 2022. It was also expected at 1.8% for 2023-2024.

After the coronavirus crisis, the Dutch economy rebounded stronger than other euro nations. The DNB stated that it expected it to grow by 4.5% in 2019, 3.6% in 2022 and 1.7% in 2023.

The strong recovery can also be seen in the labor market. For months, the number of vacant jobs has exceeded the number unemployed. In fact, the DNB anticipates that unemployment will remain historically low until the end 2023.

According to the bank, this outlook could get worse if there is a coronavirus pandemic that continues throughout the next year.

The Netherlands maintained a tight lockdown in place on Sunday to stop the spread of Omicron variant.