According to a flash estimate released by the national statistics office CBS, the annual rate of inflation in the Netherlands fell to 4.4% in March, the lowest it has been in 18 months. This marks
a significant drop from February's inflation rate of around 8%. The decrease in inflation is attributed to a sharp decline in energy prices, though food still remains 15% more expensive than it was a year ago.
It's important to note that the estimate is based on incomplete data and will be revised later this month. When calculated according to European methods, which excludes the impact of rental housing, inflation was 4.5% this month, down from 8.9% in February, according to the CBS.
The CBS is also in the process of developing a new method of calculating energy prices, based on actual contracts rather than new ones. This new method will come into effect in June of this year.
Despite the positive news regarding inflation and improving consumer confidence, the CBS stated on Friday that the overall economic picture in the Netherlands is slightly more negative than in previous months.
The decline in inflation is certainly a welcome development for Dutch consumers, who have been grappling with rising prices for several months. However, the fact that food prices remain 15% higher than they were a year ago is a concerning trend, particularly for low-income households.
While the drop in inflation can be attributed to falling energy prices, the overall economic outlook in the Netherlands remains somewhat uncertain. The global economy has been hit hard by the ongoing COVID-19 pandemic, and the Netherlands is no exception. Businesses have struggled to stay afloat, and many workers have been laid off or furloughed.
Despite these challenges, there are some signs of hope. The Dutch government has implemented a number of measures to support businesses and workers throughout the pandemic. Additionally, consumer confidence has been steadily improving, which could help stimulate spending and boost economic growth in the coming months.
It's important to remember that the flash estimate released by the CBS is just a preliminary figure and will be revised later this month. However, the drop in inflation is certainly a positive development, and it will be interesting to see how the Dutch economy continues to fare in the coming months. Photo by Lionel Allorge, Wikimedia commons.