December 2025 CPI Report for the Netherlands: Inflation Moderates Amid Persistent Pressures
The latest Consumer Price Index (CPI) for the Netherlands rose 2.90% year-on-year in December 2025, down from 3.10% in November. This marks a moderation in inflation but remains above the 2% ECB target. Key drivers include energy and food prices, while shelter costs eased slightly. Monetary policy remains cautious amid mixed signals from financial markets. External geopolitical tensions and fiscal stimulus continue to shape the outlook. Structural inflationary pressures persist, suggesting a complex path ahead for policymakers.
Table of Contents
The December 2025 CPI release for the Netherlands shows inflation easing to 2.90% year-on-year (YoY), down from 3.10% in November. This figure remains above the European Central Bank’s (ECB) 2% target but signals a slowing trend compared to the peak of 3.30% in October. The monthly change reflects a complex interplay of energy price volatility, supply chain adjustments, and domestic demand factors.
Drivers this month
- Energy prices contributed 0.45 percentage points (pp), down from 0.60 pp in November.
- Food inflation remained elevated at 0.35 pp, driven by fresh produce and dairy.
- Shelter costs eased slightly, subtracting 0.05 pp from the monthly change.
- Used car prices stabilized, contributing marginally (0.02 pp).
Policy pulse
The 2.90% CPI reading remains above the ECB’s inflation target, sustaining pressure on monetary authorities to maintain a cautious stance. The ECB’s deposit rate currently stands at 3.25%, with markets pricing in a 40% chance of a further hike in early 2026.
Market lens
Immediate reaction: The EUR/NLG currency pair saw a mild appreciation of 0.15% within the first hour post-release, reflecting confidence in the inflation moderation. Dutch 2-year government bond yields fell 5 basis points, signaling reduced near-term rate hike expectations.
Examining core macroeconomic indicators alongside the CPI reveals a nuanced inflation environment. The Netherlands’ GDP growth slowed to 1.10% annualized in Q3 2025, down from 1.60% in Q2, reflecting weaker export demand and cautious consumer spending. Unemployment remains low at 3.70%, supporting wage growth pressures.
Monetary Policy & Financial Conditions
The ECB’s current monetary stance is restrictive but data-dependent. Dutch financial conditions tightened slightly as credit spreads widened by 10 basis points in November, reflecting global risk aversion amid geopolitical uncertainties. The Dutch central bank’s forward guidance emphasizes patience, awaiting clearer inflation trends.
Fiscal Policy & Government Budget
Fiscal policy remains expansionary, with the government running a 1.20% of GDP deficit in 2025, funding green energy projects and social programs. This stimulus supports domestic demand but poses inflationary risks if supply constraints persist.
External Shocks & Geopolitical Risks
Ongoing tensions in Eastern Europe and supply chain disruptions continue to pressure energy and commodity prices. The Netherlands’ open economy is vulnerable to these shocks, which could trigger renewed inflation spikes or growth slowdowns.
Drivers this month
- Energy: 0.45 pp (down from 0.60 pp last month)
- Food: 0.35 pp (steady)
- Shelter: -0.05 pp (easing)
- Used cars: 0.02 pp (stable)
This chart highlights a trending downward inflation path after a summer peak. Energy price moderation is the key driver, but persistent food and shelter costs suggest inflation remains sticky. The data supports a cautious but optimistic outlook for inflation normalization in 2026.
Market lens
Immediate reaction: Dutch 2-year bond yields dropped 5 basis points, reflecting eased rate hike expectations. The EUR/NLG currency pair strengthened by 0.15%, signaling market confidence in inflation moderation. Breakeven inflation rates for 5-year horizons declined by 10 basis points.
Looking ahead, inflation in the Netherlands faces a mixed outlook. The base case scenario projects CPI settling near 2.50% by mid-2026, supported by easing energy prices and stable supply chains. However, upside risks include renewed geopolitical shocks or stronger wage growth, which could push inflation above 3%. Downside risks stem from slower global growth and fiscal tightening, potentially dragging inflation below 2%.
Scenario probabilities
- Bullish: Inflation falls below 2.00% by Q3 2026 (30% probability)
- Base: Inflation stabilizes around 2.50% through 2026 (50% probability)
- Bearish: Inflation rises above 3.00% due to shocks or wage pressures (20% probability)
Structural & Long-Run Trends
Long-term inflation drivers include demographic shifts, energy transition costs, and evolving labor market dynamics. The Netherlands’ commitment to green energy may sustain upward price pressures in the medium term. Meanwhile, digitalization and productivity gains could offset inflationary forces.
The December 2025 CPI data for the Netherlands confirms a moderation in inflation but underscores persistent underlying pressures. Policymakers face a delicate balance between supporting growth and containing inflation. Financial markets have responded positively to the easing trend, but geopolitical and fiscal risks remain. Structural factors suggest inflation will not return to pre-pandemic lows soon, requiring vigilance and flexibility in policy responses.
Key Markets Likely to React to CPI
The Dutch CPI influences several key markets, including government bonds, the euro currency, and select equities sensitive to inflation and interest rates. The following symbols historically track inflation dynamics closely:
- ASML – A major Dutch tech stock sensitive to economic cycles and inflation expectations.
- EURUSD – Euro-dollar currency pair reacts to ECB policy shifts driven by inflation data.
- EURNLG – Directly reflects Dutch currency moves post-CPI releases.
- SHELL – Energy sector stock impacted by oil prices and inflation-driven energy costs.
- BTCUSD – Bitcoin often reacts inversely to inflation surprises and monetary tightening.
Inflation vs. ASML Stock Price Since 2020
Since 2020, ASML’s stock price has shown a moderate inverse correlation with Dutch inflation rates. Periods of rising CPI often coincide with increased volatility in ASML shares, reflecting investor concerns over input costs and interest rate hikes. The recent CPI moderation aligns with a stabilization in ASML’s price trend, suggesting easing inflation may support tech sector valuations.
Frequently Asked Questions
- What does the latest CPI reading mean for Dutch consumers?
- The 2.90% inflation rate indicates prices are still rising but at a slower pace, easing cost-of-living pressures slightly.
- How does the CPI affect ECB monetary policy?
- Inflation above 2% keeps the ECB cautious, likely maintaining or modestly increasing interest rates to anchor expectations.
- Why is the CPI important for financial markets?
- CPI data influences bond yields, currency values, and equity prices by signaling inflation trends and policy shifts.
Key takeaway: The Netherlands’ inflation is cooling but remains elevated, requiring balanced policy and market vigilance in 2026.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The December 2025 CPI print of 2.90% YoY compares to 3.10% in November and a 12-month average of 2.70%. This marks a clear deceleration from the October peak of 3.30%, signaling easing inflation pressures. The monthly CPI change was 0.20%, down from 0.30% in October.
Energy inflation moderated to 6.50% YoY from 8.00% in November, while food inflation held steady at 4.20%. Shelter inflation slowed to 1.80% YoY, the lowest in six months. These shifts reflect both base effects and supply-side improvements.