Higher VAT rate pushes Dutch consumer prices to biggest increase since 2013
In January Dutch consumers paid 2.2 percent more for goods and services than the same month last year - the biggest price increase since September 2013, Statistics Netherlands reports. According to the stats office, the increase of the low VAT rate put upward pressure on the prices of food, books and public transport, among other things.
At the start of January the low VAT rate was increased from 6 percent to 9 percent. The low VAT rate covers 22.5 percent of all consumer goods and services. Compared to a year earlier, food was 3.3 percent more expensive in January.
Another reason for the increased consumer prices is the higher taxes on and higher supply costs for gas and electricity, according to Statistics Netherlands. In January energy was 17.4 percent more expensive than a year earlier.
A decrease in home care costs, on the other hand, had a lowering effect on the increase of consumer prices. This is partly because the personal contribution for home care was reduced.
Statistics Netherlands' consumer price index is an important indicator of inflation, but is not the same as inflation. The index shows the price development of a package of goods and services, like daily groceries, clothing, petrol, rent and insurance premiums. Inflation is broader, also including industrial product, shares and commodities, for example