Preliminary figures published by Statistics Netherlands (CBS) on Friday reveal that the Dutch inflation rate reached 11,9 percent in March, up from 7,2 percent in February.

War in Ukraine drives up inflation in the Netherlands

Over the past several months, countries across Europe have battled rising prices and record-breaking inflation levels. After February 2022 appeared to offer a brief respite from these trends, the latest report from CBS and the European statistics office Eurostat has revealed that inflation is once again on the rise.

According to estimates calculated using the European HICP method, inflation in the Netherlands rose to 11,9 percent in March, meaning the prices of goods and services rose by almost 12 percent between March 2021 and last month. 

“A historic figure,” says Peter Hein van Mulligen, chief economist at CBS. "The last time inflation was this high was during the oil crisis in 1975." This sudden increase in prices is largely due to the recent staggering increase in the prices of fuel and energy following the Russian invasion of Ukraine. Inflation statistics for February were released too early to see the full economic effects of the war, experts noted. 

Dutch government works to offset rising prices

The Dutch government has taken some measures in order to offset the effects of dramatically rising prices and improve the purchasing power of citizens and residents. These measures include a so-called energy subsidy, which will be paid out by municipalities, and cutting the taxes on petrol, diesel, and energy. 

As of Friday, drivers in the Netherlands will be relieved to hear that, on top of the already falling petrol prices, the excise duty on fuel has been slashed by 17 cents per litre for petrol and 11 cents per litre of diesel. From July 1, families and households will also face lower energy bills, as the government has capped VAT on energy at 9 percent. 

Van Mulligen is optimistic that these measures should make a difference - albeit a limited one. “Lower excise duties and the reduction of energy taxes can help to offset the worst increase, but the greatest growth is in the development of world market prices. If those oil prices continue to rise, almost no excise reduction can compete with that."