The Dutch inflation rate has been below the eurozone average for three years now. Between August 2003 and August 2006 prices in the Netherlands increased by 4.8 percent. The eurozone average was 6.9 percent.
Second lowest inflation rate, behind Finland
The price rises between August 2003 and August 2006 were especially higher in Luxembourg, Spain and Greece. Only Finland had a lower inflation rate than the Netherlands.
However, between August 2000 and August 2003, prices in the Netherlands increased much faster than in the eurozone. There was a price rise of 11.4 percent in the Netherlands versus 6.7 percent in the eurozone. Only in Greece and Ireland did prices rise faster then, while the inflation rate of Germany, Belgium, Austria, Finland and France was below the eurozone average.
The countries with relatively low inflation rates between August 2000 and August 2003 also had a relatively low inflation rate after 2003. Only the Netherlands shifted from a relatively high to a low inflation rate.
Price increase August 2003-August 2006
Price increase August 2000-August 2003
Modest price increases for many products
In the past three years, the price increases in the Netherlands were lower than in the eurozone in most product groups. Food and non-alcoholic beverages contributed most, because their price development was 7.5 percent lower in the Netherlands than in the eurozone between August 2003 and August 2006. Also the price development of alcohol and tobacco lagged behind. Rents, energy prices, and health care costs, on the other hand, increased faster than in the eurozone.
Price differences between the Netherlands and the eurozone
Cause of the differences
The relatively large difference between the inflation rates of the Netherlands and the eurozone has multiple causes. One major cause of the falling Dutch inflation rate is the modest wage cost increase. The price war in the supermarkets has also reduced inflation.
Jan Walschots and Gert-Jan van Steeg