Inflation rate 9.6 percent in December

With the December figure being known, the inflation rate for the entire year can also be provided. On average, consumer prices were 10.0 percent higher in 2022 than in the previous year.

In addition to the overall inflation rate, CBS also calculates monthly average price developments if energy (gas, electricity and district heating) and motor fuel prices are not taken into account. Excluding energy and motor fuels, inflation would have increased from 6.8 percent in November to 7.5 percent in December.

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 rate of 9.6 percent in December 2022 means that consumer product prices were 9.6 percent higher than in December 2021. This means the 9.6-percent inflation in December was not on top of the 9.9-percent inflation in November.

Smaller increase in energy prices

Energy price developments (electricity, gas and district heating) had a dampening effect on inflation this month. In December, energy was 52 percent more expensive than one year previously. In November, the year-on-year increase amounted to 70 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 and December, is considered to be income support and therefore does not influence the CPI. However, the price cap, which will be implemented as of January 2023, does have a direct impact on the price of supplied electricity or gas and is therefore included in the CPI as of January. This is further explained in the article ‘How energy measures are incorporated into the CPI’

Study on energy prices progressing

Energy makes a significant contribution to overall inflation. The price development of energy is measured by CBS on the basis of new energy contracts. However, many households still have a fixed contract for gas and electricity. CBS has been studying new methods for the measurement and calculation of energy prices as part of the CPI and HICP; these should result in a more refined presentation of current energy price developments. The first provisional research results < Towards a new method of calculating energy prices > were published at the end of October 2022. In its research, CBS uses data files that are provided by energy companies. In the coming period, CBS will continue to provide regular updates and results from the study along with its reports on inflation.

Downward effect of motor fuels

The price development of motor fuels had a downward effect on the inflation rate. In December, the price decrease amounted to 7.0 percent year on year, while there was a price decrease of 0.6 percent in November.

Clothing and food had an upward effect

Prices of clothing and food rose further in December. Clothing was 12.3 percent more expensive than in December 2021. In November, the year-on-year increase was 6.6 percent. Food was 17.0 percent more expensive than in December 2021. In November, the price increase was 15.7 percent. The prices of bread and cereals, cheese and cottage cheese 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 11.0 percent more expensive in December than in the same month last year, down from 11.3 percent in November. Inflation in the euro area fell from 10.1 percent in November to 9.2 percent in December.

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. The differences are further explained in an article 'Differences between consumer price figures'.

Initial estimate of inflation according to CPI

As of 2023, CBS is publishing monthly flash estimates of inflation according to the CPI. This estimate will be published every month at the same time as the usual HICP estimate. The CPI flash estimate was published 'Flash estimate of inflation: December' for the first time on 6 January 2023 for 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 for use in indexation. More on the CPI flash estimate can be found in the article 'Flash estimate of the consumer price index (CPI)'.

Implications of the coronavirus crisis for inflation calculation

Due to the government's COVID-19 countermeasures, several services were either limited or unavailable as of March 2020. As a result, for some of the services no transactions took place that allowed for price measurements. In accordance with Eurostat guidelines, CBS opted for the most appropriate estimation method in each situation. Although for December 2022 prices were no longer estimated on account of COVID-19, estimates made one year previously in December 2021 do still affect last month's inflation rate.