Inflation rate down to 7.6 percent in January

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 7.5 percent in December to 7.7 percent in January.

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 7.6 percent in January 2023 means that consumer product prices were 7.6 percent higher than in January 2022. This means the 7.6-percent inflation in Janaury was not on top of the 9.6-percent inflation in December.

Lower inflation due to price cap

On 1 January 2023, a price cap on energy came into effect. In 2023, households will pay no more than a maximum price for gas (1.45 euros per m3), electricity (0.40 euros per kWh) and district heating (47.38 euros per GJ) up to a certain annual consumption level. The price cap caused inflation to fall. In January, energy was 3.4 percent cheaper than one year previously. In December, energy was still 52 percent more expensive.

In autumn 2022, the Dutch government 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 was implemented in 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. On 2 March 2023, CBS will provide an update of this research.

Smaller increase in clothing prices

In addition to energy, the price development of clothing also had a downward effect on the development of inflation. Clothing was 9.4 percent more expensive than in January 2022. In December, the year-on-year increase was 12.3 percent.

Upward effect of childcare, food and petrol

The price development of childcare, however, had an upward effect on the inflation rate. In January, childcare was 6.3 percent more expensive than one year previously. In December, the price increase was 2.2 percent. Food and petrol also had an upward effect. The year-on-year price increase of food rose from 17.0 percent in December to 17.6 percent in January. Petrol was 8.2 perocent cheaper in January than in the same month last year; in December, this was 10.3 percent.

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 8.4 percent more expensive in January than in the same month last year, down from 11.0 percent in December. Inflation in the euro area fell from 9.2 percent in December to 8.5 percent in January. For the first time since November, inflation in the Netherlands is lower than inflation in the euro area.

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".

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 January 2023 prices were no longer estimated on account of COVID-19, estimates made one year previously in January 2022 do still affect last month's inflation rate.