Inflation rate up to 6.4 percent in January

Higher energy prices despite reduction in energy tax

In January, energy (electricity, gas and district heating) were almost 90 percent more expensive than one year previously. In December, the year-on-year price increase was 75 percent. Energy contributed more than 3 percentage points to the total inflation of 6.4 percent in January.

The Dutch government has taken measures to curb the rise in energy costs for consumers. These are temporary measures for 2022. The tax credit on energy bills has been increased and the tax rate on electricity has been reduced.

Despite energy tax reduction, the year-on-year price rise of energy increased. This is because variable energy supply rates rose further in January.

Food more expensive

The price development of foodstuffs also had an upward effect on inflation. Food was 4.3 percent more expensive in January than one year previously. In December, food prices were up by 2.6 percent. For almost all types of food, the year-on-year price increase was higher in January than in December. Bread, cheese and quark made the largest contribution to this development.

On the other hand, the price development of clothing and footwear had a downward effect on inflation. In January, prices were up by 3.5 percent, against 5.3 percent in December.

Inflation gap between the Netherlands and the euro area continues to widen

Aside from the consumer price index (CPI), CBS also calculates the European harmonised consumer price index (HICP). According to the European HICP, consumer goods and services in the Netherlands were 7.6 percent more expensive in January than in the same month last year, up from 6.4 percent in December. Inflation in the euro area rose from 5.0 percent in December to 5.1 percent in January, according to provisional figures. The difference between the HICP of the Netherlands and the euro area has not been this great since January 2002.

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

The main conceptual difference between the CPI and the HICP for the Netherlands is that, unlike the CPI, the HICP does not take into account the costs of homeownership. In the Dutch CPI, these costs are calculated based on developments in rental property prices.

Implications of the coronavirus crisis for consumer price measurements

Due to the government's COVID-19 countermeasures, several services have been either limited or unavailable since April 2020, such as accommodation and food services. As a result, there were no transactions that allowed for price measurements for some of the services. In accordance with the Eurostat guidelines, CBS has 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 2 percent of consumer spending in January.