Sep 29, 2023 at 6:39 AM Update: 12 minutes ago
Inflation fell sharply in September to 0.2 percent, the lowest level since 2016. This was mainly due to lower energy prices. Groceries are still 10 percent more expensive than in September last year.
The inflation rate of 0.2 percent is the lowest since September 2016. In the autumn of 2022 there was an inflation peak of more than 14 percent, since then price increases have become less pronounced.
The decrease is mainly because energy prices are considerably lower than in September last year. According to the first inflation estimate from statistics agency CBS, energy is now 38 percent cheaper than in September last year.
Just like in August, foodstuffs are still considerably more expensive than last year (+10 percent). Prices of services and industrial goods also continued to rise considerably, by 4.6 percent and 4.5 percent.
It is striking that inflation using a European calculation method (which makes it easier to compare countries) is already negative 0.3 percent. Then there will be price drops and deflation. According to Statistics Netherlands, monthly inflation is also negative in September. Consumer prices were on average 0.4 percent lower than in August.
Energy prices in a different way in inflation rate
These low inflation figures are influenced by the fact that energy prices have been incorporated into the inflation figures in a different way since June of this year. Previously, only newly available energy prices were taken into account for inflation. These were very high in September last year. But many people did not immediately see this reflected in their energy bill because they had a permanent contract. The current inflation figures look at the energy bill that Dutch people actually pay.
When inflation was so low in 2016, people still considered it a problem. Central banks then tried to push inflation up towards the ideal 2 percent by cutting interest rates.
In the past year, the European Central Bank (ECB) has raised interest rates ten times to slow inflation. The idea is that borrowing becomes less attractive when interest rates are high. As a result, consumers and companies are inhibited in their spending and this also puts less pressure on prices.
Image: ANP
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2023-09-29 04:39:08
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