Data released today by Statistics Netherlands show that inflation in the Netherlands is on the rise again. After a period of decline, the percentage has reached 6.1 percent. According to Jasper Lukkezen, editor-in-chief of the economists’ magazine ESB, this is “large economy-wide inflation”, a harbinger of an “approaching recession”.
‘This is an increase in everything else in the Netherlands besides energy. Services have become more expensive, industrial goods have become more expensive. And these price increases are a bit higher than in April last year,’ says Lukkezen.
However, based on data released this morning, it’s hard to say why prices have risen while energy costs are falling. “It’s anticipating cost increases those companies expect in the future, such as higher wages,” says Lukkezen. On the other hand, companies also see an opportunity to raise prices because they have previously faced higher costs due to expensive energy.
“Prospects are not good”
Remarkable
The fact that inflation is on the rise in the Netherlands is surprising, because the rate has decreased in Germany, France and Spain. This is partly due to the Dutch price ceiling for energy. “People often have longer contracts, which are less flexible, so people don’t easily benefit from lower prices,” Lukkezen thinks.
According to this inflation data, energy prices fell by 18%, but wholesale market energy prices fell much faster. “You don’t see that reflected in the wider prices in the Netherlands.”
Recession ahead
In line with other countries, consumer spending decreased in the Netherlands. “At some point inflation will stop because things get too expensive,” Lukkezen says.
The downside is an impending recession. Germany is already formally involved, the eurozone is holding on and Holland is heading towards it, he thinks. ‘This is also reflected in the decline in producer confidence. The prospects are not good.’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
