Biggest hike in consumer prices since the introduction of the euro!
Consumer prices shot up last year. According to figures from Statistics Netherlands (CBS), on average, prices were 2,6 percent higher than in 2018 – the biggest increase since 2002, when the euro was introduced. Moreover, the Netherlands had one of the highest consumer price increases in the whole of the Eurozone last year.
Prices going up
The increase in price for goods like foodstuffs and other consumer products is for the most part down to the increase of the low VAT rate from six to nine percent which came into effect last year. The energy tax increase also contributed.
Prices for food and alcohol-free beverages in the supermarket went up on average by a whopping four percent. Prices in restaurants, cafes and company canteens went by 4,6 percent on average. Goods and services which fall under the low VAT rate were on average 4,1 percent more expensive than in 2018 and those falling under the high VAT rate were 2,3 percent more costly. In total, 22,5 percent of consumer expenditure was on products and services that come under the low VAT rate.
Speaking of price rises; electricity was, on average, a massive 15,7 percent more expensive than in 2018 and gas was 10,6 percent more expensive. These increases are partially due to higher supply costs and levies on gas and electricity.
Some things are cheaper
Luckily, not everything is getting more expensive, amongst other things, domestic care decreased in price and mobile telephony, as well as audio and video equipment, became cheaper. Unfortunately, price increases outstripped pay rises. Last year, collective labour agreement wages went up by 2,5 percent on average, less than the increase in consumer prices.
According to the European harmonised price index, prices in the Netherlands rose on average by 2,7 percent. The only country whose prices shot up even further was Slovakia. Price increases for the Eurozone as a whole fell in 2019 to 1,2; in 2018, it was 1,7.