The Dutch inflation rate has shot up from 7.3% in February to 11.9% in March 2022 – reaching a record high amidst a cost of living crisis which is shared by other countries across the EU.
The steep climb from an inflation rate of under 2% twelve months ago is due mostly to the sharp rise in energy prices, reports NU.
The Central Bureau of Statistics (CBS) estimated that the cost of energy in 2022 has doubled in the past twelve months. The war in Ukraine has exacerbated the rise in both oil and gas prices.
In maart 2022 was de #inflatie in Nederland volgens de Europees geharmoniseerde consumentenprijsindex (#HICP) 11,9 procent. Dit is een 1e raming, de reguliere cijfers, inclusief de Nederlandse consumentenprijsindex (#CPI), worden 7 april gepubliceerd. Zie: https://t.co/ktyrrHDr2g pic.twitter.com/zGG2RF2sGO
— CBS (@statistiekcbs) April 1, 2022
The rise in the inflation rate represents how much more expensive most goods have become in the Netherlands.
Professor of Monetary Economics at Erasmus School of Economics Casper de Vries said that rising inflation already started with the quick recovery after the COVID-pandemic, but that energy shortages were now a major factor.
He expressed concern that if energy prices remain so high it will have a detrimental effect on the economy’s capacity to recover.
He posited a differentiated approach to easing the burden of inflation, saying that if the government wanted to compensate the most affected groups in society, it should raise the tax burden on the least affected group, and compensate the most affected groups with the additional tax revenues.