Inflation in Netherlands drops to 3.3% in 2024, driven by housing and tobacco

Inflation in the Netherlands has eased by an average of 3.3 percent in 2024 compared to the previous year, according to final figures from the Centraal Bureau voor de Statistiek (CBS) released Monday. This represents a slight decline from the 3.8 percent inflation rate recorded in 2023.

The increase in inflation last year was primarily driven by higher housing costs and tobacco prices. Housing rents rose by an average of 3.7 percent in 2024, up from 2.5 percent the previous year. Tobacco products became 29.0 percent more expensive following excise tax hikes implemented in April 2024.

Excise duties on 50 grams of shag tobacco increased from 10.83 to 17.35 euros, while taxes on 20 cigarettes rose from 5.87 to 7.81 euros. The impact of these tax increases on consumer prices was delayed, as tobacco stocks with the old excise rates were sold in the months immediately following the tax hike.

Prices for home-related products, including furniture and household items, helped offset inflationary pressures in 2024, with prices in this category falling by 3 percent compared to 2023. Food prices also increased at a much slower rate, rising by just 1.1 percent in 2024 after a sharp 12.1 percent jump the previous year.

Inflation ticked up slightly in December to 4.1 percent, compared to 4.0 percent in November. This increase was largely due to a significant rise in the cost of stays at bungalow parks, which were 26 percent more expensive in December 2024 compared to the same month the previous year. CBS attributed this to a greater share of holiday bookings during the Christmas vacation period, a time when prices traditionally rise due to increased demand.

Additionally, motor fuel prices contributed to the inflationary trend in December. However, clothing prices declined slightly during the same period.

Using the European Union’s Harmonized Index of Consumer Prices (HICP), Dutch inflation stood at 3.2 percent in 2024, down from 4.1 percent in 2023. This method of calculation differs from the CBS approach, as it excludes the costs of owning a home.

Despite the lower figure, inflation in the Netherlands remained above the eurozone average, which dropped to 2.4 percent in 2024, down from 5.4 percent the previous year.