Amsterdam - Inflation in the Netherlands is expected to increase, Dutch central bank president Nout Wellink indicated during a debate with the Dutch parliament on Tuesday.

Referring to the Dutch economy of the 1970s, Wellink said all European governments should try to limit their deficits, resist wage increases and not allow companies to increase their prices as a result of the rise in prices of raw materials.

Inflation in the Netherlands is expected to rise this year and next year to more than 3 per cent. Wellink also indicated Dutch inflation might for the first time in decades be above the European average.

He also added the European Central bank would most likely succeed in reducing inflation to below 2 per cent. (dpa)