Annual inflation rate fell for 4th straight month to 7.6 percent

Inflation in the Netherlands dropped to 7.6 percent in January, the fourth consecutive month of lower inflation than the month before, Statistics Netherlands (CBS) reported on Thursday. In December, consumer goods and services were still 9.6 percent more expensive than the year before.

The government’s cap on energy prices, in particular, had a dampening effect on inflation last month. Since January 1, households and small businesses have paid a lower rate for gas and electricity up to a certain usage. “The price ceiling led to a fall in inflation,” the stats office said. “In January 2023, energy was 3.4 percent cheaper than in the same month last year. In December 2022, energy was still 52 percent more expensive than one year previously.”

Energy is a significant contributor to overall inflation. Statistics Netherlands measures the price development based on new energy contracts. But as the vast majority of households don’t need a new contract every month, energy’s actual effect on inflation is lower. CBS is looking at how to measure this effect more accurately.

In addition to energy, the price development of clothing also lowered inflation in January. Clothing was 9.4 percent more expensive last month than a year earlier, compared to 12.3 percent in December.

Prices for childcare, food, and petrol pushed inflation higher. Childcare was 6.3 percent more expensive in January, compared to 2.2 percent in December. Food cost 17.6 percent more in January (17.0 percent in December), and petrol cost 10.3 percent more (8.2 percent in December).