Dutch Central Bank slashed 2022 economic forecast; Long-term vision for pandemic needed [_link]

— NL Times (@NL_Times) December 20, 2021

Dutch Central Bank slashed 2022 economic forecast; Long-term vision for pandemic needed

The central bank predicted the country will achieve growth of 2.2 percent next year, down from the 3.6 percent it previously projected. In a hastily produced calculation, Olaf Sleijpen, the DNB director of monetary affairs and financial stability, said the organization is assuming the lockdown will last throughout the entire first quarter of the new year.

In 2023, the economy will further recover with economic growth of 2.1 percent. In the original estimate that DNB had prepared, that expected to be a contraction of about 1.7 percent. The economy has grown by 4.5 percent this year, the central bank believes.

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The DNB is also assuming that inflation will peak at the end of this year. On average, currency depreciation this year is 2.7 percent, while inflation will remain on the high side in the coming years. Inflation could hit 3 percent in coming years.

The central bank has further appealed to the government to come up with a longer-term strategy for dealing with coronavirus. The extra financial support being offered now is perfectly understandable, Sleijpen said. "But in the long run, the generic way in which it is now distributed will have an economically disruptive effect."