Inflation 4.6 percent in July, according to flash estimate

An inflation rate of 4.6 percent for July 2023 means that prices of consumer products were on average 4.6 percent higher than in July 2022. The 4.6-percent inflation is therefore not on top of the 5.7-percent inflation of June.

Price development of product groups

In addition to the inflation rate, CBS also publishes the price development of a number of product groups as part of its flash estimate. These product groups are aggregations of expenditure categories on a particular theme, such as all services. The price development of all categories in the CPI will be published on 8 August.

New energy price measurement method

As of June 2023, CBS has adopted a new method to measure energy prices and incorporate them into the CPI. Under this method, CBS collects data on both new and existing energy contracts from the energy suppliers. This enables CBS to calculate the rates actually paid by households for gas and electricity more accurately. The old method was solely based on the prices of new energy contracts.

This change in methodology has affected the inflation rate. The inflation rate for July 2023 is the difference between the CPI for July 2023 and July 2022. However, while the current CPI uses the new method for measuring energy prices, the July 2022 CPI is still based on the old method. This means the inflation rate for July 2023 contains a so-called ‘method break’. On 30 June, CBS published a background article explaining in more detail what the change means for the CPI, the inflation rate and the use of the CPI for indexation purposes.

HICP flash estimate

As of 1996, CBS publishes two different inflation rates. One based on the Consumer Price Index (CPI) and one on the Harmonised Index of Consumer Prices (HICP). According to the HICP flash estimate, inflation stood at 5.3 percent in July. This was 6.4 percent in June.

In order to facilitate comparison between countries, EU member states calculate a consumer price index according to internationally agreed definitions and methods. Eurostat calculates the inflation rates for the euro area and the European Union based on these harmonised indices (HICP) from all EU countries. The European Central Bank (ECB) uses the HICP to formulate its monetary policies for the euro area. In addition, most countries produce their own national consumer price index.
For the Netherlands, the main difference between the CPI and the HICP is that, unlike the CPI, the HICP does not take into account the costs related to home ownership. In the CPI, these costs are calculated based on the development of housing rents. However, that is not the only difference. The differences are further explained in another publication.