October 13, 2022

Statistics Netherlands (CBS) reports that the consumer price index (CPI) was 14.5 percent higher in September than in the same month last year. In August, the inflation rate stood at 12.0 percent. The rise in inflation was mainly due to the price development of energy.
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 increased from 6.0 percent in August to 6.5 percent in September.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 14.5 percent in September 2022 means that consumer product prices were 14.5 percent higher than in September 2021. This means the 14.5-percent inflation in September was not on top of the 12.0-percent inflation in August.

Soaring energy prices

Prices of energy (electricity, gas and district heating) rose further in September and had an upward effect on inflation. In September, energy was 200 percent more expensive than one year previously. In August, the year-on-year increase was amounted to 151 percent.

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.

Inflation also higher due to education and clothing

Price trends in education and clothing had an upward effect on inflation as well. For a study programme in the 2021-2022 academic year at adult general secondary education (VAVO), secondary vocational education (MBO), higher professional education (HBO) or university, students received a 50-percent discount on the course fee or tuition fee. This discount was a government measure in connection with the coronavirus crisis and is no longer available as of the 2022-2023 academic year, with education becoming more expensive as a result. Prices of clothing were 8.0 percent up year on year in September; in August, the increase was 3.3 percent.

Lower price increase for petrol and holiday park accommodations

The price development of petrol, on the other hand, had a downward effect on the inflation rate. In September, the price increase of petrol amounted to 6.7 percent year on year, against 12.9 percent in August. The price development of a stay in a holiday park also had a downward effect. The year-on-year price increase was 1.0 percent in September, down from 5.7 percent in August.

Inflation excluding energy also increasing

In addition to the general inflation rate, CBS also publishes the average price increase every month if the development of energy and motor fuel prices is not taken into account. The price developments of gas, electricity, district heating and motor fuels are not included in the calculation of this figure. Inflation excluding energy and fuel prices is also increasing. In September, consumer goods and services excluding energy and motor fuels were 6.5 percent more expensive than in the same month last year. In August, the year-on-year price increase was 6.0 percent.

Euro area inflation rate at 10 percent

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 17.1 percent more expensive in September than in the same month last year, up from 13.7 percent in August. Inflation in the euro area rose from 9.1 percent in August to 10.0 percent 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.

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 September 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.

Source: Statistics Netherlands (CBS)
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