The Dutch economy may have recovered well from the coronavirus closures but new developments in world trade mean economy growth will come to a standstill this year, the Dutch central bank said in a new report on Monday.

Russian aggression in Ukraine is further driving up energy prices, world trade is under pressure and there are more uncertainties, the bank said.

In 2022, the economy will grow by 2.8% but this is largely due to the strong recovery at the end of 2021. Growth will recover again by the end of the year, reaching 1.5% in 2023 and 1.7% in 2024, the bank said in its latest forecasts.

Inflation will average 8.7% this year but will fall back to 3.9% next year and 2.4% in 2024, the bank said. Unemployment will fall to 3.3% this year and rise slightly to 3.6% in 2023 and wages will rise as competition for staff intensifies.

The central bank also drew up a more gloomy scenario based on the war in Ukraine lasting for a longer period. In that case, the economy will grow by 2% this year while inflation will average 10.8%.