Dutch inflation rate down in December
According to the latest consumer price index by Statistics Netherlands the Dutch inflation rate reached 1.7 percent in December 2003. This is the lowest level since 1998. In November the inflation rate was 2.0 percent. The decrease was mainly due to price developments in food and beverages. According to the European harmonised index Dutch inflation was 1.6 percent, which is 0.5 percentage points lower than the Eurozone average.
Falling prices in December
In December 2003 consumer prices fell by an average of 0.6 percent on November. Food and beverages became cheaper, with fresh fruit and vegetable prices falling most. The lower prices were mainly caused by the continuing price war between Dutch super markets.
Car fuels also became cheaper in December. Clothing and shoe prices fell by 6 percent, but this is normal for the time of the year at the start of the winter sales.
Inflation rate at a low level
The month-on-month price decrease was stronger in December 2003 than in December 2002. Therefore inflation decreased from 2.0 percent in November to 1.7 percent in December. This is the lowest level since December 1998.
The lower inflation rate can be attributed mainly to the price developments in food and soft drinks. These were slightly cheaper in December than the year before. In November prices were still 1.4 percent higher than the year before.
The price developments of car fuels also contributed to the lower inflation rate. Car fuels were 0.7 percent cheaper than in December 2002, whereas they had been 2.4 percent more expensive in November than in November 2002.
Inflation rate in 2003 lowest since 1998
In 2003 the inflation rate averaged 2.1 percent. In the first quarter of 2003 the observed inflation rate was still 2.4 percent, but after this the inflation rate stabilised until the end of November at between 2.0 and 2.1 percent. The drop in inflation in December is remarkable.
The inflation rate in 2003 is the lowest since 1998. The average price increases were especially high in 2001, which came to 4.2 percent, and in 2002 which amounted to 3.3 percent.
The lower average inflation rate in 2003 is mainly caused by smaller price increases of food and soft drinks, household furnishings and household appliances and by smaller price increases in catering. Clothing and shoe prices actually dropped by an average of 3 percent in 2003 as opposed to a 3 percent price increase in 2002.
On the other hand the rates for consumer-related taxes and government services, and the prices of housing, energy and transport all increased more in 2003 than in 2002.
Price developments well below the Eurozone average
The Dutch inflation rate according to the European harmonised standard fell from 2.0 percent in November to 1.6 percent in December. Eurostat, the European statistical office, estimates the Eurozone inflation rate in December at 2.1 percent.
Dutch inflation was 0.5 percentage points below the Eurozone average. Between May 2000 and the end of August 2003 the Dutch inflation rate was consistently higher than the Eurozone average.
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