Dutch prices show steepest rise within the eurozone

In March 2019, consumer prices in the Netherlands rose twice as fast as the average across the eurozone. The gap between price rises in the Netherlands (2.9 percent) and in the eurozone (1.4 percent) has widened sharply in recent months. This is mainly attributable to the price hikes in energy, food and beverages in the Netherlands. Statistics Netherlands (CBS) reports this today on the basis of the latest Eurostat data.

It is the first time since measurement of the HICP started in 1997 that the Netherlands has the steepest price rise in the eurozone. Around the European Union, CPI-based inflation was only higher in Hungary and Romania. The average CPI-based inflation rate across the EU stood at 1.6 percent.

Annual rate of change (% annual rate of change)
 HICP
Portugal0.8
Greece1.0
Cyprus1.1
Finland1.1
Croatia1.1
Ireland1.1
Italy1.1
Denmark1.2
Spain1.3
France1.3
Malta1.3
Germany (until 1990 former territory of the FRG)1.4
Slovenia1.6
Austria1.7
Poland1.7
Sweden1.8
United Kingdom1.9
Belgium2.2
Estonia2.2
Luxembourg2.4
Czechia2.6
Lithuania2.6
Latvia2.7
Slovakia2.7
Bulgaria2.8
Netherlands2.9
Hungary3.8
Romania4.2
Source: CBS, Eurostat, ONS

Dutch energy prices rise fastest among eurozone countries

Prices of energy for residential use in the Netherlands are the fastest-rising among the eurozone countries. In March 2019, energy prices in the Netherlands were 16.7 percent up on one year previously. A slightly lower increase was recorded in Cyprus: 12.5 percent. In Belgium and Germany, the CPI-based inflation rate stood at 8.8 and 4.7 percent respectively. The price rise was steepest in the Netherlands, in part due to higher energy prices and taxes. Energy for residential use in the Netherlands mainly comprises electricity, natural gas and district heating. Outside the Netherlands, other fuels are used as well, such as heating oil.

Energy price changes in the eurozone (year-on-year % change)
landannual rate of change
Netherlands16.7
Cyprus12.9
Luxembourg10.4
Finland9.3
Belgium8.8
Lithuania8.4
Italy7.7
Slovakia6.4
Latvia6.3
Slovenia6
eurozone5.9
France5.3
Germany4.7
Ireland4.6
Greece4.1
Austria4.1
Estonia3.8
Spain3.6
Malta0.1
Portugal-1.5
Source: CBS, Eurostat

Food and drinks more expensive

Likewise, prices of food and beverages in the Netherlands showed the sharpest rise across the eurozone. Food items and non-alcoholic drinks sold in Dutch shops were 3.6 percent more expensive than twelve months previously. This price rise is nearly three times as high as the average change across the eurozone, which amounted to 1.3 percent. On the other hand, alcoholic beverages in the Netherlands rose less rapidly in price compared to the eurozone.

Price changes food and non-alcoholic beverages (year-on-year % change)
landannual rate of change
Netherlands3.6
Malta3.5
Cyprus3.2
Slovakia3.1
Lithuania2.4
France2.4
Latvia2.3
Estonia2.3
Austria1.6
eurozone1.3
Portugal1.2
Luxembourg1.2
Greece1.1
Belgium1
Italy1
Spain0.9
Finland0.9
Germany0.6
Slovenia0.4
Ireland-0.6
Source: CBS, Eurostat

Not only retail prices of food and beverages went up; in restaurants, cafés and canteens as well, prices of food and drink were on average 4.7 percent higher than in March 2018. Among the eurozone countries, food and beverage prices rose faster only in Estonia and Lithuania. The average price rise in the eurozone for these items amounted to 2.0 percent.

Tax increases

In January 2019, the lower VAT rate was increased from 6 to 9 percent. In addition, energy taxes and certain excise duties were raised. These tax measures contributed to the overall price changes of goods and services.
In order to measure the theoretical contribution of new tax measures, CBS as well as Eurostat compile indices for consumer prices excluding the impact of tax rate changes. This theoretical impact is strongest in the Netherlands compared to all other eurozone countries. To what extent the tax increases are passed on in final consumer prices, thus how much is contributed by the tax measures, is not known.

Consumer prices, maximum effect of tax changes and other price changes (year-on-year % change)
 Maximum effect of tax changesEffect of other price changes
Netherlands1.51.4
Latvia0.42.3
Slovakia02.7
Lithuania02.6
Luxembourg02.4
Belgium0.22
Estonia0.12.1
Austria01.7
Slovenia-0.11.7
Germany01.4
eurozone0.11.3
France0.11.2
Malta0.31
Spain0.11.2
Finland0.20.9
Italy0.11
Cyprus-0.11.2
Ireland0.60.5
Greece-0.11.1
Portugal00.8
Source: CBS, Eurostat

CPI inflation rates comparable over longer period of time

CPI-based inflation rates for the Netherlands are generally similar to those for the entire eurozone. Over the past decade, prices in both the Netherlands and the eurozone have risen by 14 percent.
However, price changes in the Netherlands over the first few months of 2019 were well above the eurozone average. This is not the first time such a strong increase is recorded in the Netherlands compared to the eurozone. In the period 2009-2018, there were three years in which prices in the Netherlands rose faster than across the eurozone. The first year was 2009, when energy prices in the eurozone fell before those in the Netherlands. In 2012 and 2013 as well, the Netherlands saw higher inflation rates. This is when the highest VAT rate was raised from 19 to 21 percent, along with several other tax measures.
The HICP is compiled according to the European harmonised method in order to facilitate comparison between the various EU member states. Price indices for the eurozone and the European Union as a whole are calculated on the basis of the HICPs of the individual member states.

Harmonised Indices of Consumer Prices (HICP) (annual rate of change)
year montheurozoneNetherlands
2009Jan 1.11.7
Feb 1.21.9
Mar 0.61.8
Apr 0.61.8
May 01.5
June-0.11.4
July-0.6-0.1
Aug -0.2-0.1
Sep -0.30
Oct -0.10.4
Nov 0.50.7
Dec 0.90.7
2010Jan 0.90.4
Feb 0.80.4
Mar 1.60.7
Apr 1.60.7
May 1.70.4
June1.50.2
July1.71.3
Aug 1.61.2
Sep 1.91.4
Oct 1.91.4
Nov 1.91.4
Dec 2.21.8
2011Jan 2.31.9
Feb 2.42
Mar 2.71.8
Apr 2.82.1
May 2.72.3
June2.72.3
July2.63.2
Aug 2.53.2
Sep 33
Oct 32.8
Nov 32.6
Dec 2.82.5
2012Jan 2.72.9
Feb 2.72.9
Mar 2.72.9
Apr 2.62.8
May 2.42.5
June2.42.5
July2.42.6
Aug 2.62.6
Sep 2.62.5
Oct 2.53.3
Nov 2.23.2
Dec 2.23.4
2013Jan 23.2
Feb 1.93.2
Mar 1.73.2
Apr 1.22.8
May 1.43.1
June1.63.2
July1.63.1
Aug 1.32.8
Sep 1.12.4
Oct 0.71.3
Nov 0.91.2
Dec 0.81.4
2014Jan 0.80.8
Feb 0.70.4
Mar 0.50.1
Apr 0.70.6
May 0.50.1
June0.50.3
July0.40.3
Aug 0.40.4
Sep 0.30.3
Oct 0.40.4
Nov 0.30.3
Dec -0.2-0.1
2015Jan -0.6-0.7
Feb -0.3-0.5
Mar -0.1-0.3
Apr 0.20
May 0.60.7
June0.50.5
July0.50.8
Aug 0.40.4
Sep 0.20.3
Oct 0.40.4
Nov 0.10.4
Dec 0.30.5
2016Jan 0.30.2
Feb -0.10.3
Mar 00.5
Apr -0.3-0.2
May -0.1-0.2
June0-0.2
July0.2-0.6
Aug 0.20.1
Sep 0.4-0.1
Oct 0.50.3
Nov 0.60.4
Dec 1.10.7
2017Jan 1.71.6
Feb 21.7
Mar 1.50.6
Apr 1.91.4
May 1.40.7
June1.31
July1.31.5
Aug 1.51.5
Sep 1.61.4
Oct 1.41.3
Nov 1.51.5
Dec 1.31.2
2018Jan 1.31.5
Feb 1.11.3
Mar 1.41
Apr 1.21
May 21.9
June21.7
July2.21.9
Aug 2.11.9
Sep 2.11.6
Oct 2.31.9
Nov 1.91.8
Dec 1.51.8
2019Jan 1.42
Feb 1.52.6
Mar 1.42.9
Apr

Sources