Inflation rate down to 4.4 percent in March

In addition to the overall inflation rate, CBS also calculates monthly average price developments if energy (gas, electricity and district heating) and motor fuel prices are not taken into account. Excluding energy and motor fuels, inflation would have been 8.1 percent, the same rate as in February.

Inflation is measured each month as the increase in the consumer price index (CPI) relative to the same month in the previous year. The consumer price index shows the price development of a package of goods and services as purchased on average by Dutch households. An inflation rate of 4.4 percent in March 2023 means that consumer product prices were 4.4 percent higher than in March 2022. This means the 4.4-percent inflation in March was not on top of the 8.0-percent inflation in February.

Decrease in energy and motor fuel prices

The decline in inflation was mainly due to energy price developments. In March, energy was 36.5 percent cheaper than one year previously. In February, the year-on-year decrease amounted to 2.9 percent.

The price development of motor fuels also had a downward effect on the inflation rate. Motor fuels were 20.8 percent cheaper in March than twelve months previously. In February, prices were 9.4 percent lower. In March 2022, consumers paid on average 2.29 euros for a litre of petrol, while in March of this year they paid 1.81 euros. The price of diesel was 2.12 euros per litre in March 2022, versus 1.63 euros in March 2023.

New method of calculating energy prices

As from the reporting month of June 2023, in which the flash estimate will be published on 30 June, CBS will employ a new method to measure energy prices in the CPI. Under the current method, the price development of energy is measured on the basis of new energy contracts. The new method uses transaction data provided by energy suppliers, so that the tariffs paid under long-standing energy contracts can also be taken into account. This will result in a more accurate inflation rate. On 2 March, CBS published an update on its research into the new method of measuring energy prices.

Euro area inflation rate down

Since 1996, CBS has published two different inflation rates: one based on the Consumer Price Index (CPI) and one based on the Harmonised Index of Consumer Prices (HICP). According to the European HICP, consumer goods and services in the Netherlands were 4.5 percent more expensive in March than in the same month last year, down from 8.9 percent in February. Inflation in the euro area fell from 8.5 percent in February to 6.9 percent in March.

Difference between CPI and HICP

In order to facilitate comparison between countries, EU member states calculate a consumer price index according to internationally agreed definitions and methods. The European Central Bank (ECB) uses the HICP to formulate its monetary policies in the euro area. In addition, most countries produce their own national consumer price index.

The main conceptual difference between the CPI and the HICP for the Netherlands is that, unlike the CPI, the HICP does not take into account the costs related to home ownership. In the Dutch CPI, these costs are calculated based on developments in rental property prices. The differences are further explained in the article Differences between consumer price figures.