Inflation rate 2.7 percent in 2021

Energy and motor fuels more expensive

The inflation rise is mainly due to the price development of gas and electricity. In 2021, electricity prices increased by 22.2 percent on average year-on-year. In 2020, they were still 39.6 percent lower than in the previous year. The price of natural gas rose by 16.7 percent on average last year; in 2020, the increase amounted to 2.6 percent. For both electricity and gas, the rise can be attributed to higher variable supply tariffs in the past year.

Motor fuels also became more expensive in 2021. The price of petrol was 16.2 percent higher than in the previous year, the price of diesel 18.5 percent higher. In 2020, these fuels were cheaper by 5.2 and 8.8 percent year-on-year, respectively. Whereas consumers still paid an average of 1.56 euros for a litre of petrol at the pump in 2020, this was 1.82 euros in 2021. The pump price for a litre of diesel fuel went down from 1.24 euros to 1.46 euros.

Education and food became cheaper

In the 2021-2022 academic year, which started in September, students paid less for their education. They received 50 percent discount on course or tuition fees in adult general secondary education (VAVO), secondary vocational education (MBO), higher professional education (HBO) and university (WO), a measure which was introduced by the Dutch government in connection with the coronavirus crisis. As a result, the costs of attending education were 13.3 percent lower in 2021 than in the previous year. In 2020, the costs were 1.1 percent higher year-on-year.

Food price developments also had a downward effect on inflation in 2021. Food products became 0.2 percent cheaper compared to 2020, while that year prices were up by 2.0 percent. The main reason were the price developments of meat and fruit.

CAO wages rose less rapidly than consumer prices

Last week, CBS reported that collectively agreed (CAO) wages rose by 2.1 percent in 2021. According to provisional figures, last year’s CAO wage increase was therefore 0.6 percentage points lower than the consumer price inflation rate.

Eurozone inflation also rising

Aside from the Dutch consumer price index (CPI), CBS also compiles the European harmonised index of consumer prices (HICP).

Based on the HICP, prices of goods and services in the Netherlands increased by 2.8 percent on average in 2021. In 2020, the HICP increase for the Netherlands was 1.1 percent. Across the euro area, inflation rose from 0.3 percent in 2020 to 2.6 percent in 2021, according to provisional figures.

The HICP is compiled according to the European harmonised method in order to facilitate comparison between the various EU member states. Price indices for the euro area and the European Union as a whole are calculated on the basis of the HICPs of the individual member states. The European Central Bank (ECB) uses these figures to formulate its monetary policy.

Unlike the CPI, the HICP does not take into account the costs related to home ownership. In the Dutch CPI, these costs are calculated based on developments in house rents.

Implications of the coronavirus crisis on inflation rate calculation

Due to the government's COVID-19 countermeasures, some services have been either limited or unavailable since April 2020. As a result, there were no transactions for some of these services that allowed for price measurements. In accordance with the Eurostat guidelines, CBS opted for the most appropriate estimation method in each situation. The product groups that required price estimates as a result of the coronavirus measures accounted for approximately 3 percent of consumer spending in 2021.

The coronavirus pandemic has significantly altered consumer spending patterns. The change in consumption pattern affected CPI inflation in 2021.