10 February 2022, by Victoria Séveno
The Dutch inflation rate has been steadily rising since last summer, but new figures from Statistics Netherlands (CBS) reveal that in January it reached 6,4 percent – the highest figure recorded since May 1982.
CBS: Dutch inflation rose to 6,4 percent in January
The most recent figures reported by CBS show that, in January 2022, goods and services in the Netherlands were 6,4 percent more expensive than one year earlier. This marks a significant increase compared to the end of last year, when CBS declared Dutch inflation to be 5,7 percent.
This marks the country’s highest inflation rate in almost 40 years, matching the figure recorded by CBS in May 1982. The national inflation rate peaked in November and December of 1981 when it reached 7,3 percent.
While the coronavirus pandemic has had significant effects on prices, CBS highlights the rising costs of food and energy as the main reasons for the high inflation rate. The ongoing European energy crisis meant that, last month, gas and electricity prices were 88,2 percent higher than in January 2021. This, combined with increased transportation costs, had knock-on effects on the price of food and drink, which rose by an average of 4,3 percent over the same period.
ECB expected to increase interest rates later this year
Earlier this month, estimates from the European statistics office Eurostat and CBS calculated that inflation in the Netherlands rose to 7,6 percent in January – significantly higher than the 6,4 percent reported by Eurostat at the end of last year.
There are two different systems for measuring national inflation rates: Harmonised Indices of Consumer Prices (HICP) – the method used by Eurostat – and the Consumer Price Index (CPI) – the method used by CBS. What sets the two methods apart are the goods and services used to determine changes in price. The CPI, for example, also takes the prices of owner-occupied homes into account, while the HCIP does not.
While inflation is rising across the continent, the president of the European Central Bank (ECB), Christine Lagarde, has said interest rates will remain unchanged for the time being, and that the decision will be reviewed in March. Meanwhile, the president of De Nederlandsche Bank, Klaas Knot, expects inflation will remain high into 2023, and that the ECB’s interest rates will be increased at the end of this year.