Figures published today by Statistics Netherlands show that inflation in the Netherlands is rising again. After a period of decline, the percentage came to 6.1 percent. According to Jasper Lukkezen, editor-in-chief of economists magazine ESB, this is a ‘broad inflation across the entire economy’, a harbinger of an ‘approaching recession’.
‘This is an increase in everything else in the Netherlands besides energy. Services have become more expensive, industrial goods have become more expensive. And those price increases are somewhat higher than in April last year,’ says Lukkezen.
However, why prices have gone up, while energy costs are falling, is difficult to say on the basis of the figures published this morning. ‘It is anticipating cost increases that those companies expect in the future, such as higher wages,’ says Lukkezen. On the other hand, companies also see an opportunity to increase prices as they have previously faced higher costs due to expensive energy.
‘The outlook is just not good’
Remarkable
The fact that inflation is rising in the Netherlands is striking, because the percentage has fallen in Germany, France and Spain. This is partly due to the Dutch price ceiling on energy. ‘People often have longer contracts, which are less flexible, so people don’t easily benefit from lower prices,’ Lukkezen thinks.
According to these inflation figures, energy prices have fallen by 18 percent, but energy prices on the wholesale market have fallen much faster. ‘You don’t see that reflected in the broader prices in the Netherlands.’
Recession in sight
In line with other countries, consumer spending has fallen in the Netherlands. ‘At a certain point that inflation will stop itself because things just become too expensive,’ says Lukkezen.
The flip side of this is an approaching recession. Germany is already formally involved, the eurozone is hanging on to it and the Netherlands is heading for it, he thinks. ‘It is also reflected in the declining producer confidence. The prospects are just not good.’
