Inflation rate down to 0.2 percent in September

The price development of energy has had a major impact on inflation for some time now. In addition to the overall inflation rate, CBS also calculates the 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 been 5.5 percent in September, down from 6.4 percent in August.

Inflation down due to price development of energy

The decrease in inflation was mainly due to the price development of energy (electricity, gas and district heating). In September, energy was over 57 percent cheaper than twelve months previously. Prices in August were almost 47 percent lower than in the same month last year.

The price development of energy has had a major impact on inflation for some time now. This is mainly due to high prices last year. In the second half of 2022, energy prices in the CPI increased sharply. Partly because of this, very high inflation was measured during that period. Energy prices in the CPI are now considerably lower than in 2022. Inflation is measured as the development of prices compared to the same month in the previous year, which is why it is now lower.

As of June 2023, CBS uses a new method to measure energy prices and incorporate them in the CPI. The method change affects the inflation rate. On 30 June, CBS published a background article explaining in more detail what this switch means for the CPI, the inflation rate and the use of the CPI for indexation purposes.

Motor fuels more expensive

The price development of motor fuels had an upward effect on the development of inflation. Motor fuels were 5.5 percent more expensive in September 2023 than in September 2022. In August, they were 0.6 percent cheaper than in the same month last year. In September 2023, consumers paid on average 2.12 euros for a litre of petrol and 1.91 euros for a litre of diesel. In August, they paid 2.08 and 1.82 euros respectively.

Price developments in the short term

Every month, CBS reports on inflation with the year-on-year development of the CPI. However, this figure says nothing about the monthly development of prices during such a twelve-month period. The CPI does provide that insight. Consumer prices fell by 0.4 percent in September 2023 relative to August. The price level during the past twelve months was the highest in October 2022.

On a side note, when comparing with the previous month, seasonal influences must be taken into account. For example, airline tickets are more expensive during holiday months than in months outside the holiday season. Prices are temporarily higher then, but this is not a structural price increase. Due to these seasonal influences, month-on-month developments are often more volatile than year-on-year developments.

Inflation in the euro area 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 0.3 percent cheaper in September than in the same month last year. In August, prices were still 3.4 percent higher than one year previously. Inflation in the euro area fell from 5.2 percent in August to 4.3 in September.

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 the article Differences between consumer price figures.