Inflation climbed to 6.4% in January

Inflation rose to 6.4 percent on an annual basis in January. That is the highest level in over 40 years. According to Statistics Netherlands (CBS), which released the figures, higher food and energy prices pushed inflation. In December, inflation was still 5.7 percent, which was also the highest in almost 40 years. In August 1982, prices rose by an average of 5.9 percent year-on-year.

According to CBS, the gas and electricity bill was almost 90 percent higher in the first month of 2022 than a year earlier. In December, the annual price increase was 75 percent. The contribution of energy to headline inflation amounted to more than 3 percentage points.

The government has taken measures to reduce the increase in energy bills. The tax credit on the energy bill was increased, and the tax rate on electricity was lowered. Despite the reduction in energy tax, the annual price increase of energy was higher. According to CBS, this is because variable energy supply rates rose further in January.

Food was 4.3 percent more expensive in January than a year earlier. In December, it was 2.6 percent. The annual price increase was higher in January than December for almost all types of food. Bread, cheese, and curd made the largest contribution to this development. The price development on clothing and shoes, on the other hand, depressed inflation.

CBS previously released inflation figures calculated on the European harmonized method (HICP), which showed that consumer goods and services in the Netherlands became 7.6 percent more expensive in January than a year earlier. According to this method, inflation in the entire eurozone stood at 5.1 percent in January. According to CBS, the difference between Netherlands' and the eurozone inflation has not been that big since December 2001.

The main difference between CBS's own calculation and the European harmonized consumer price index (HICP) for the Netherlands is that the latter does not consider the costs of living in one's own home. In the CBS calculation method, these costs are calculated based on the development of housing rents.