The Dutch economy will grow more slowly between 2022 and 2025, the government’s forecast agency CPB said on Monday.

In its first mid-term prognosis for the period, the CPB said growth would fall back a more modest 1.1%, as the size of the labour market shrinks.The forecast for 2018 to 2021 is 1.8%.

As the population ages, strong demand in the healthcare sector will increase the number of people working in the care services by 2.1% a year, the CPB said.

Inflation will remain under EU targets, at 1.7% up to 2021 and 1.5% beyond that. Wage rises will be modest and there will no increase in spending power.

At the same time the budget surplus, set to reach 0.3% of GDP next year, will become a deficit of 0.3% between 2022 and 2025, due to increased spending on care, social security and international alliances.

The research takes the impact of new agreements on pensions and climate change into account as well as demographic forecasts.