News Inflation
Substantial drop in inflation with new calculation method
Prices in June were 5,7% higher than in June last year. As a result, inflation has decreased slightly. At least according to the old calculation method of Statistics Netherlands. But according to the new method that has been applied since June, inflation in May was significantly higher than the published 6,1%, namely 9,9%. If Statistics Netherlands had already started using the new calculation method last month, inflation would have fallen sharply in June.
All that time, Statistics Netherlands did not include real energy prices in the consumer price index (CPI), but the most recent one. As of June, Statistics Netherlands will calculate with the energy prices that are actually paid by households. It was also calculated how high inflation would have been in the past period using the new method. And guess what: it was much higher this year.
The old method used the prices of new contracts such as energy suppliers that pass them on to the Netherlands Authority for Consumers and Markets (ACM). As a result, when energy prices started to go through the roof, the inflation rate rose faster than if real contracts had been taken into account. In recent months you have seen the opposite effect.
Since this month, a different method has been used to calculate the energy prices that are included. In the spring of last year, Statistics Netherlands started collecting contract data from households with various energy suppliers. Based on this data, Statistics Netherlands also calculated what the 'real' inflation would have been.
Where the published CBS figure peaked in September 2022 with an inflation rate of 14,5% (following the gas price peak at the end of August), according to the new method it was 7,8%, before rising to the highest point from 11,6% in January this year. While 'actual' inflation was actually lower last year, it remained higher than published inflation over the past few months. For example, inflation for May according to the new calculation method was 9,9% (instead of 6,1%), April 10,3% (instead of 5,2%), March 10,8% (instead of 4,4%), February 11,5% (instead of 8%) and January 11,6% (instead of 7,6%).
Linda van Eekeres
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