Inflation rate also low in December

Dutch inflation was 1.1 percent in December, 0.1 percentage points higher than in November 2006. The slight increase is largely caused by price developments of petrol,  flowers and plants. Inflation is calculated from the consumer price index (CPI), relative to the same month one year previously.

With 0.9 percentage points, costs of housing, water and energy, were the main contributors to the 1.1 percent inflation rate in December. Food and soft drinks contributed 0.2 percentage points. Consumer-related taxes, like property tax and government services, on the other hand, reduced the rate by 0.3 percentage points. Price developments in communication also tempered inflation, accounting for 0.2 percentage points.

The harmonised index of consumer prices (HICP) allows comparisons between the member states of the European Union. According to this method, the inflation rate in the Netherlands was 1.7 percent in December, marginally higher than November’s 1.6 percent. According to Eurostat, the statistical office of the European Union, the inflation rate in the eurozone averaged 1.9 percent in December. Dutch inflation is 0.2 percentage points lower.

Inflation in the Netherlands averaged 1.1 percent in 2006, unprecedented since1989. Inflation was curbed by lower government rates in 2006.

The CPI measures price developments of a basket of goods and services, purchased by the average Dutch consumer. The current basket is based on spending patterns in 2000. The contents of the basket will be updated in 2007. The basket will be updated on an annual basis from now on, instead of once every five years. Furthermore, health care costs not included in the basic health insurance policy will be included in the CPI. This also applies to supplementary insurance premiums.

Dutch inflation