households are improving, 2023 will be a year of recovery

Many households will improve financially this year compared to 2022. This is partly due to the government’s compensation package. The coming year will therefore be dominated by the recovery after last year’s price increases. At the same time, uncertainty hangs over the market due to energy costs and inflation, says the National Institute for Budget Information (Nibud).

When calculating the purchasing power figures, Nibud assumes an inflation rate of 3.5 percent. That level was previously calculated by the Central Planning Bureau.

Based on this, the purchasing power of households will increase between 0.5 percent and 8.1 percent, depending on family composition and income. Purchasing power indicates how much an average household can buy with its disposable income, adjusted for inflation. Nibud bases the figures on 117 example households.

“Given the many payment arrears that people have incurred in the past year, it is good to see that the wallet is looking a lot better this year,” says Nibud director Arjan Vliegenthart.

According to Nibud, working people will have more salary left over this year because they receive more employed person’s tax credit and therefore have to pay less tax. In addition, many people with a job receive a collective wage increase. Those who have children will also receive more child benefit and a child-related budget this year.

Benefits and assistance have been increased for non-workers. The health care allowance has also risen, meaning that single people with the lowest incomes have to spend 3 euros per month on their health insurance.

“All these measures provide some financial breathing space that most people desperately need, because in 2022 everyone will have had to give up considerably and prices in the supermarket will remain high,” says Nibud.

Nevertheless, the increased energy prices and inflation are still felt in the wallet. Nibud warns that many households cannot absorb more financial blows. “Payment arrears have increased considerably and few households will be able to tolerate more price increases.”