If we compare the price level with last month, life became slightly cheaper in January. This is evident from new data from Statistics Netherlands. While inflation in December was still 9.6% year-over-year, prices in January averaged only 7.6% higher year-over-year.
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This is good news for families suffering from high utility bills. Still, it’s too early to cheer, warns De Young. This is because the drop is almost exclusively due to the drop in energy prices. “For all other things, like food, prices keep going up, both year-on-year and month-on-month,” says the economist. Consumers notice this in the supermarket. The products there keep getting more expensive.
What we can conclude is that the maximum price that the government has set for energy works, concludes De Jong. “But you only see that effect once.” So to get an idea of expected inflation in February you have to look at all other products and goods. “These prices keep going up.” It is therefore possible that inflation will pick up again this month.
Even if it’s not that simple. In January, many sellers raise the prices of their products and services. “As a result, January data is always a bit difficult to interpret.”
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Furthermore, in recent times many products have become more expensive, precisely because of the higher energy prices that are passed on to customers. “Now we will see a reverse movement,” predicts De Jong. ‘Energy prices are down and that will affect other components as the year progresses. But how quickly that will happen remains to be seen.’