January's inflation rate rises to 1.4 percent

Dutch inflation was 1.4 percent in January, 0.3 percentage points higher than in December 2006. The increase is largely accounted for by price developments of  government services which were lowered substantially at the beginning of 2006. This pushed down the inflation rate in all months of 2006 by over 0.4 percentage points. This tempering effect has worn off in January 2007. Inflation is calculated from the consumer price index (CPI), relative to the same month one year previously.

With 0.8 percentage points, the costs of housing, water and energy were the main contributors to inflation in January. Food, drinks and tobacco contributed 0.2 percentage points, equal to hotel and catering services. Consumer-related taxes and government services also contributed to the upward trend (0.1 percentage points). Price developments in communication and transport, on the other hand, tempered inflation in January 2007, accounting for 0.3 percentage points.

The harmonised index of consumer prices (HICP) allows comparison between the member states of the European Union. According to this method, inflation in the Netherlands was 1.0 percent in January. In December, the rate stood at 1.7 percent. According to Eurostat, the statistical office of the European Union, the inflation rate in the eurozone averaged 1.8 percent in January.

The CPI measures price developments of a basket of goods and services, purchased by the average Dutch consumer. Since January 2007, the contents of the basket have been changed and extended. Currently, the basket is based on spending patterns in 2006. 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