If those who can easily cope with the higher energy tariffs also reduce their consumption, they will help to replenish the gas reserves and keep the prices down. If people take shorter showers and lower the thermostat, the demand for energy drops. But the biggest factor is, of course, energy. If people start flying less, the personnel shortage at Schiphol and other airports will also become less of a problem. “The risk of a situation arising in which the demand for hospitality personnel far outstrips supply is reduced - and with it the risk of exorbitant wage increases. Less frequent visits to restaurants, for instance, may help to alleviate the shortage of hospitality staff - who left the sector in large numbers during the pandemic and did not return afterwards - becomes less acute, says Kalshoven. More generally, cutting spending will prevent the economy from overheating - and thus inflation - if there are bottlenecks on the supply side.” If consumers save on energy, this will help to keep prices down. Shortages - or the risk thereof - have caused prices to explode. But the most obvious reason is, of course, energy. This is due to the aftermath of lockdowns in China, for example, but also because staff in the hospitality industry or at Schiphol Airport have been leaving. Demand has recovered after Corona, but there is still a shortage of supply. Kalshoven: “Macroeconomically, we are getting this inflation because the supply of some key products and services is not matching demand. Moreover, high prices can introduce people to options they had never seriously considered before, and lead to more flexibility in dealing with future changes. But do consumer savings also offer advantages? According to Kalshoven, they do, firstly because they prevent the economy from overheating, and secondly because the cause of those savings - mainly increased energy prices - can shift the energy transition into a higher gear. Bad news for many businesses and consumers. Consumer confidence and willingness to buy fell to record lows in August.įor some, the increased price level is an inconvenience, but for others it can be the financial death blow, making a trip to the food bank unavoidable. Inflation has risen further since then and it seems only a matter of time before consumer spending will decrease. Total domestic consumption in June still showed an increase compared to the previous year, but the question is how long this growth will last. Energy prices are at the top of the list and are prompting people in the Netherlands to drastically cut back on their spending.
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Particularly - but not only - due to the war in Ukraine, price levels have soared in the space of six months. But we cannot deny that there are also some bright spots.”
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“The current situation, in which high inflation forces lower spending, has mainly shadow sides.
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This time: macroeconomist and senior strategist Charles Kalshoven on the positive flip side of massive consumer spending cuts. Current issues related to economics, (responsible) investment, pensions and income: every week, an APG expert gives a clear answer to the question of the week.