Categories: Economy

Household consumption up, but high inflation remains a concern Related articles

Despite inflation, stories of banking crises, a possible approaching recession and high energy prices, households in the Netherlands continue to consume more. More money was spent in February than in the same month of the previous year. That’s a 2.6 percent growth, but according to economist Frank Notten of Statistics Netherlands (CBS), there are also reasons for concern.

Households spent more money in February than in the same month a year earlier. (ANP / Peter Hilz)

Corona measures

Last year, the latest corona measures were still in place in the country in February. “At the time, masks still existed and the catering sector was open to a limited extent. Now you see that there is mainly an increase in consumption in services and that also includes the catering sector, for example,’ explains Notten. ‘Nevertheless , the consumption of goods has decreased”.

‘Especially in the hotel and restaurant, leisure and cultural sectors, there is an increase in spending’

Frank Notten, economist at Statistics Netherlands

So more was spent, but less wasted in February of this year. Households, in particular, have spent less on food and luxury goods, but also on furniture, clothing and energy. The services sector, on the other hand, has shown a huge increase in spending, knows the CBS economist. “Especially things that were limited last year, such as dining, recreation and culture, are now seeing the biggest increase.”

High inflation

However, the fact that most goods consumption has declined is still a cause for concern, Notten says. ‘It is mainly due to high inflation, the sentiment is not very good. It will be difficult as long as inflation remains high.’ Inflation is already decreasing, but according to the economist this is mainly due to the drop in energy prices.

“Underlying food inflation was still 15% last month, and core inflation also remains elevated,” Notten explains. “The Central Planning Bureau expects inflation to decline over the course of the year, but it’s still high right now.” According to the economist, this puts consumption under pressure.

Author: Myrtle Koopman
Source: BNR

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