According to CBS chief economist Peter Hein van Mulligen, the biggest development this month has been seen in the energy component of the inflation rate. “In November, energy was still more than 40 percent more expensive than a year earlier, in December it was still 30 percent. This is partly because energy has gotten cheaper month after month, but also because energy prices started to rise sharply in December last year.’
Foods
The good news for consumers ends with this favorable trend in energy prices, says Van Mulligen. Most other goods and services, on the other hand, increased in price in December. ‘This is particularly evident in the food sector in particular. In November, they were 13% more expensive year-over-year, but climbed to 14% in December. So even if high energy prices stop, inflation will still be high.’
According to Van Mulligen, the inflation reading in January is likely to be even lower than last month’s. ‘Then the energy cap will come into force, so almost all Dutch people will pay much less for their energy. You will definitely see that reflected in inflation and I expect a bigger effect than December’s 0.3 percentage point.’
Uncertainties
For BNR’s in-house economist Han de Jong, December’s decline is somewhat disappointing, as inflation data from other countries is more favourable. «Inflation fell by 0.4% in France, but by 1.7% in Germany. So actually I had hoped for a little more decrease.’
De Jong hopes we will follow the trend that can be seen in France and Germany. ‘We know that food prices are often lower than energy prices. Energy inflation has fallen very sharply in recent months. This gives me hope that food price inflation will also decrease this year”.
De Nederlandsche Bank expects inflation to amount to 4.9% in 2023. “We are entering the year at around 10%, so it should decline sharply over the course of the year,” says De Jong. ‘In January, our inflation rate will drop dramatically due to the energy price ceiling, which will definitely drop by one and a half percentage points. But the uncertainties remain large. The Central Planning Bureau assumes an average gas price in Europe of 128 euros for 2023. It is now around 70, so it could just be a pity.’