Inflation in the Netherlands is set to remain at a very high level next year and economic growth will almost come to a standstill, according to the latest projections from the International Monetary Fund.

‘The global economy continues to face steep challenges, shaped by the Russian invasion of Ukraine, a cost-of-living crisis caused by persistent and broadening inflation pressures, and the slowdown in China, IMF chief economist Pierre-Olivier Gourinchas said.

‘The slowdown is most pronounced in the euro area, where the energy crisis caused by the war will continue to take a heavy toll, reducing growth to 0.5% in 2023.’

The IMF says inflation in the Netherlands will average at 12% this year and 8% in 2023. And while the economy is set to grow 4.5% in 2022, by next year that will have ebbed away to 0.8%. Unemployment, the IMF said, will rise slightly to 3.9%.

The IMF projections are more gloomy than those published by domestic economists last month. The government’s macro-economic forecasting agency CPB puts growth at 1.5% next year, if inflation falls back to 2.6% as predicted.

In particular, central banks need to keep a steady hand with monetary policy firmly focused on taming inflation, the IMF said.