Inflation rate sank to 1.3 percent last year

Inflation rates sunk to 1.3 percent in the Netherlands in 2020 compared to 2.6 percent in the year prior, Statistics Netherlands reported on Tuesday. This means that consumers spent 1.3 percent more on their daily essentials than in 2019. 

In the past year, energy costs sank by nearly 12 percent compared to the year prior, contributing to the decline in the average price increase.

Food item prices rose by only two percent in 2020. In 2019, the inflation rate on food items lay at 4.3 percent, partly due the low VAT rate increasing from six to nine percent.

Wages under collective labor agreements rose by 3 percent on average last year, so more than inflation. The majority of the wage increases were agreed upon before the effects of the corona crisis could be felt.

The inflation rate of the Netherlands in 2020 is in fourth highest in the eurozone, which saw an average inflation rate of 0.3 percent. The highest rates were found in Slovakia, Austria and Lithuania. Greece was at the bottom of the ranking, experiencing a deflation rate of 1.3 percent. Cyprys, Estonia, Ireland, Spain, Slovenia, Portugal and Italy also had deflation.