Food prices no longer driving inflation

Inflation in the Netherlands remains persistently high, but food prices now play a smaller role in this. While food products previously contributed significantly to price increases, they have actually helped push inflation down slightly since last year. Other categories, such as tobacco and hospitality prices, now have a much greater impact on the persistently high inflation rates.

Food products easing inflation

According to the Centraal Bureau voor de Statistiek (CBS), inflation stood at 3.3% in January, which is also the average for 2024 so far. In the past, rising food prices were often pointed to as a key driver, but that impact has shifted. Over the past year, food and non-alcoholic beverages actually reduced inflation by -0.2 percentage points. This means that without this category, inflation would have been 0.2 percentage points higher.

Tobacco and hospitality as major culprits

So what is pushing inflation up? Tobacco and the hospitality sector are playing a significant role. Hospitality prices have risen faster than average, and the sharp price increase of tobacco has had a clear inflationary effect. Smoking has become considerably more expensive, which is something smokers feel directly in their wallets.

Food prices may rise again

Although food had a dampening effect on inflation in 2024, this could change in the coming year. The FAO Food Price Index, which tracks global food prices, has been rising for some time. This may indicate that food prices could start increasing more sharply in 2025. ING Research expects inflation to remain at 3.3% this year, driven in part by rising rental and labor costs.

Ing.nl