Gas and electricity prices are falling less rapidly

Gas and electricity prices are falling less rapidly
Gas and electricity prices are falling less rapidly
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The average price increase of goods and services was 3.2 percent in January compared to the same month last year, the Central Bureau of Statistics (CBS) reports in an initial estimate.

According to Statistics Netherlands, the estimate has been calculated based on incomplete source data. In December inflation was still 1.2 percent. The increase was mainly because the influence of energy price developments on inflation decreased in January.

In January there was a much less sharp drop in energy prices than in December. For example, energy and fuel together became on average almost a quarter cheaper in the last month of 2023 than a year earlier. In January, energy and fuels became only more than 2 percent cheaper.

Excluding energy, inflation was 3.5 percent in January. In December that was 3.4 percent.

The effect of gas and electricity prices on inflation is decreasing

The prices of energy, such as gas, electricity and district heating, had a major influence on inflation for some time. For example, energy prices increased in 2022 due to the war in Ukraine and inflation soared. From January 2023, the price ceiling led to lower energy prices, and partly as a result, inflation was lower in 2023.

Because the introduction of the price ceiling was exactly one year ago in January, the influence of energy prices on inflation decreased in January 2024.

Prices of food, drinks and tobacco increased by more than 4 percent in January. In December this increase was still more than 5 percent. Services were 4.8 percent more expensive than a year earlier.

According to the European measuring method, which is slightly different from that of Statistics Netherlands, prices rose by 3.1 percent on an annual basis in January. In December that was 1 percent. The method agreed within the European Union to measure inflation does not take into account the costs of living in your own home. The inflation rate for the entire eurozone will be announced later in the day.

An overwhelming majority will see their expenses rise again this year, responds CNV chairman Piet Fortuin. “Too many workers are in a pinch and can hardly afford their daily groceries.”

READ ALSO: Only when wage growth slows down can the ECB lower interest rates – but that is not the case, says DNB boss Klaas Knot

The article is in Dutch

Tags: Gas electricity prices falling rapidly

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