Inflation up to 1.6 percent in November; 4.2 percent excluding energy

The higher inflation rate does not mean that prices increased in November 2023 relative to October 2023. The CPI also presents the price development on the previous month. According to the flash estimate, consumer prices were 1.0 percent lower in November than they were in October.

The price development of energy (gas, electricity and district heating) has long had a major impact on the course of inflation. The inflation rate excluding energy was 4.2 percent. This was 5.1 percent in October. In the first half of 2023, inflation excluding energy and motor fuels peaked at 8.1 percent in February and March and has declined since then.

Smaller drop in energy prices

The increase in inflation is mainly due to energy price developments. Energy was 43 percent cheaper in November than last year, but in October prices were 58 percent lower than one year previously.

The price developments of energy have had a major impact on inflation for some time now. This is mainly due to high prices last year. In the second half of 2022, energy prices in the CPI increased sharply, with a peak in October 2022. Partly because of this, high inflation rates were measured during that period. Energy prices in the CPI are now considerably lower than they were in 2022. Inflation is measured as price developments compared to the same month one year previously, which is why it is lower now.

As of June 2023, CBS uses a new method to measure energy prices and incorporates them in the CPI. The method change affects the inflation rate. On 30 June, CBS published a background article explaining in more detail what this switch means for the CPI, the inflation rate and the use of the CPI for indexation purposes.

Lower food price increases

The price developments of food had a dampening effect on the development of inflation. Food products were 6.3 percent more expensive in November than one year previously, and in October it was 7.9 percent. The lower price increase was mainly due to price developments of bread and cereals, dairy products and potatoes.

Price developments in the short term

The CPI does not only give insight into the price developments relative to one year previously (inflation) but also to the previous month. Consumer prices fell by 1.0 percent in November 2023 relative to October 2023.

On a side note, when comparing with the previous month, seasonal influences must be taken into account. For example, airline tickets are more expensive during holiday months than in months outside the holiday season. Prices are temporarily higher then, but this is not a structural price increase. Due to these seasonal influences, month-on-month developments are often more volatile than year-on-year developments.

Inflation in the euro area 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 1.4 percent more expensive in November than in the same month last year. In October, the inflation rate was -1.0 percent according to the HICP. Inflation in the euro area fell from 2.9 percent in October to 2.4 percent in November.

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.