Inflation rate down to 9.9 percent in November

CBS also calculates monthly average price developments if energy and motor fuel prices are not taken into account. Excluding energy and motor fuels, inflation would have decreased from 6.9 percent in October to 6.8 percent in November.

Inflation is measured each month as the increase in the consumer price index (CPI) relative to the same month in the previous year. The consumer price index shows the price development of a package of goods and services as purchased on average by Dutch households. An inflation of 9.9 percent in November 2022 means that consumer product prices were 9.9 percent higher than in November 2021. This means the 9.9-percent inflation in November was not on top of the 14.3-percent inflation in October.

Smaller increase in energy prices

The sharp fall in inflation was mainly due to the price development of energy (electricity, gas and district heating). In November, energy was 70 percent more expensive than one year previously. In October, the year-on-year increase amounted to 173 percent.

In autumn 2022, the cabinet announced two measures to reduce household energy costs: the temporary energy allowance and the price cap on energy. The allowance, which was paid out in November for the first time, is considered to be income support and therefore does not influence the CPI. However, the price cap does have a direct impact on the price of supplied electricity or gas and is therefore included in the CPI. This is further explained in the article on effects of energy cost measures on the CPI (Dutch only).

Study on energy prices progressing

Energy currently makes a significant contribution to overall inflation. The price development of energy is measured by CBS on the basis of new energy contracts. However, there are also households that have a fixed contract for gas and electricity. CBS is studying a new method for the measurement and calculation of energy prices as part of the CPI, in which current energy price developments will be presented in a more refined manner. So far, the first provisional calculations have now been carried out and the preliminary research results were published at the end of October. For its research, CBS uses data files provided by energy companies.

In the coming period, CBS will provide regular updates and results from the study along with its reports on inflation. The study is expected to be well advanced in early 2023. More clarity is then provided about which observation method of energy prices will be implemented, and the date when this new method will be implemented. Figures already published will not be adjusted during the transition towards a new method.

Downward effect of motor fuels

The price development of motor fuels had a downward effect on the inflation rate. In November, the price decrease amounted to 0.6 percent year on year, while there was a price increase of 7.5 percent in October. The average price for a litre of petrol at the pump fell from 2.00 euros in October to 1.91 euros in October. The price of diesel was 1.93 euros in November against 2.08 euros in October.

Prices of a stay in a holiday park rising less sharply

The price development of a stay in a holiday park had a downward effect as well. The year-on-year price increase was 1.2 percent in November, down from 8.4 percent in September. Inflation was also lower due to the price development of clothing. The year-on-year price increase was down from 9.4 percent in November to 6.6 percent in October

Food had an upward effect

The price development of food had an upward effect on the inflation rate. Food was 15.7 percent more expensive than in November 2021. In October, the year-on-year increase was 14.0 percent. The prices of bread and cereals, meat and dairy products in particular contributed to this.

Euro area inflation rate down

Since 1996, CBS has published two different inflation rates: one based on the Consumer Price Index (CPI) and one based on the Harmonised Index of Consumer Prices (HICP). According to the European HICP, consumer goods and services in the Netherlands were 11.3 percent more expensive in November than in the same month last year, down from 16.8 percent in October. Inflation in the euro area fell from 10.6 percent in October to 10.0 percent in November.

Difference between CPI and HICP

In order to facilitate comparison between countries, EU member states calculate a consumer price index according to internationally agreed definitions and methods. The European Central Bank (ECB) uses the HICP to formulate its monetary policies in the euro area. In addition, most countries produce their own national consumer price index.

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 related to home ownership. In the Dutch CPI, these costs are calculated based on developments in rental property prices.

Initial estimate of inflation according to CPI

As of 2023, CBS will also start publishing monthly flash estimates according to the CPI. This estimate will be published every month at the same time as the usual HICP estimate. The CPI flash estimate will be published for the first time on 6 January 2023, which will cover December 2022. As with the HICP, the flash estimate is based on still incomplete source data. Therefore, the flash estimate of the CPI is not suitable to use for indexation. The regular CPI and HICP figures are published a few working days after the flash estimates. The introduction of the CPI flash estimate is explained in a separate article (Dutch only).

Implications of the coronavirus crisis for consumer price measurements

Due to the government's COVID-19 countermeasures, several services were either limited or unavailable as of March 2020. As a result, there were no transactions that allowed for price measurements for some of the services. In accordance with Eurostat guidelines, CBS opted for the most appropriate estimation method in each situation. Price estimates for November 2022 are no longer related to COVID-19, but estimates made for the same month last year do still affect this month's inflation rate.