Inflation rate drops to 1.1 percent in July

05/08/2004 09:30

According to Statistics Netherlands’ consumer price index, inflation in July 2004 was 1.1 percent, 0.3 of a percent point down on June. The average rent increase, effective from 1 July 2004, was 3.1 percent.

Inflation, according to the European harmonised method fell by 0.3 percentage points to 1.2 percent. The gap between inflation in the Netherlands and the average inflation rate in the Eurozone continues to increase.

Rent increase averages 3.1 percent

Provisional figures show that  the average rent increase, effective from 1 July 2004, was 3.1 percent. Rent increase is 2.0 percentage points above inflation. In July 2003 rents increased by 3.2 percent.

Prices in July slightly lower than in June

Consumer prices went down by an average 0.1 percent from June to July 2004. Gas, motor fuels, train tickets and holiday accommodations became more expensive. Clothes, shoes and potatoes, on the other hand, fell substantially in price. Fresh vegetables, flowers and plants also became cheaper. Telephone charges went down too.

Inflation substantially lower

The decrease in the inflation rate from 1.4 to 1.1 percent in July is fairly substantial. The prices of many articles dropped. The most significant price drop concerned gas. Although gas became more expensive in July 2004, the price rise was less significant than in July last year. In July this year the price of gas was 1.8 percent above last year’s level in the same month. The price rise in June 2004 on June 2003 was a far more substantial 4.5 percent.

The strong decrease in prices for clothes and footwear is common for this time of year. Because the decrease was stronger than in July 2003, the inflation rate dropped. Telephone charges went down, whereas in July last year they went up. This also had a downward effect on the inflation rate.

Inflation in the  Netherlands under Eurozone average

According to the European method of calculation the inflation rate for the Netherlands fell from 1.5 percent in June 2004 to 1.2 percent in July 2004. Eurostat, the statistical office of the EU, expects inflation in the euro area to equal 2.4 percent in July, the same rate as in June. This implies that Dutch inflation is 1.2  percentage points below the average rate in the Eurozone. It is for the first time since 1996, when this method of calculation was introduced, that the Dutch inflation rate was so far below the Eurozone’s average.

In June the inflation rate for the Netherlands was 1.5 percent, according to the European standards, the second lowest rate in the Eurozone. Only Finland’s inflation rate was lower at  ‑0.1 percent.

PDF contains complete press release, including tables and graphics.