PARIS (Reuters – French inflation and growth are expected to moderate after a more rapid than expected recovery in 2018. A tighter labour market is likely to boost wages. This was the forecast of Sunday by France’s central bank.

According to the Bank of France, this will be 6.7% growth for second largest economy in eurozone, up from 6.3% forecast previously.

According to the central bank, post-pandemic economic momentum will slow down next year with growth falling to 3.6%, then easing further back to 2.2% and 1.4%, respectively, in 2023, and 2024.

The report also stated that the inflation caused primarily by the high cost of energy would reach a peak in the last year, at 3.5%, before falling to below 2.2% at 2022.

According to the central banking, this rate will be higher than the inflation rates in the preceding years and would also be closer to levels seen prior to 2007-2008’s financial crisis.

Prices of manufactured goods saw a rise in prices as current supply chain problems abated. However, they returned to their long-term mean close to zero next year.

The central bank predicted that the prices of services would rise gradually, hitting 2.7% in 2024 due to tighter labor market. It also said that workers will be earning more, creating an inflation scenario like the ones seen from 2002-2007.

The forecaster predicted that the average rate of unemployment would fall to 7.8% in 2018 and 7.7% by 2024. The private sector would see wage growth of 4% next year. However, it would fall to 3% after that. This would be still higher than in the decade before the pandemic.