Biggest purchasing power decline in 40 years last year; Comparable to previous crises

Last year, Netherlands residents experienced a significant loss in purchasing power that was comparable to the hits to the wallet during the major economic crises of recent decades. According to Statistics Netherlands (CBS), the Dutch population’s purchasing power declined by 1.2 percent on average.

In the past, purchasing power only fell by over 1 percent during the severe recession in the 1980s and the credit crisis of 2009-2013, the statistics office said. Purchasing power consistently increased in recent years. That was even true during the coronavirus crisis in 2020 and 2021.

Purchasing power fell so sharply last year mainly because energy prices rose rapidly after Russia invaded Ukraine. As a result, inflation skyrocketed across the board.
According to Statistics Netherlands (CBS), households with a very low income did see their purchasing power improve. That was due to the energy allowance they received to pay their much higher energy bills. It amounted to 1,300 euros.

In November and December last year, almost all households in the Netherlands also received a 190 euro discount on their energy bill. Without such compensatory measures, purchasing power in the Netherlands would have fallen faster, according to CBS.

Pensioners, for example, lost over 3 percent of their purchasing power on average. Without the energy measures, the loss would have been 4.4 percent.