Inflation under 3 percent again

Dutch inflation was 2.8 percent in October, substantially down on September’s 3.1 percent. In July, August and September, inflation exceeded 3 percent for the first time since 2002. Inflation is defined as the increase of the consumer price index (CPI) relative to the same month in the previous year.

Lower petrol prices accounted for the drop in inflation. In October, petrol was nearly 9 percent cheaper than in September this year. Petrol prices dropped by nearly 1 percent compared to October 2007.

Due to lower petrol prices, the contribution of transport services and motor fuels to inflation fell from 0.6 percentage points in September to 0.3 percentage points in October. The other factors contributing to inflation hardly changed compared to the previous month.

Increased costs of housing, water and energy contributed 0.8 percentage points to October’s inflation rate, higher prices for food and soft drinks contributed 0.7 percentage points. The category ‘various goods and services’ (e.g. insurances) also contributed substantially (0.4 percentage points). Prices of communication services and recreational and cultural services, such as audio, video, computers and software, on the other hand, had a slightly downward effect on inflation.

The harmonised consumer price index (HICP) allows comparison between the member states of the European Union (EU). According to the HICP, Dutch inflation was 2.5 percent in October, i.e. 0.3 percentage points down on September. Inflation also declined in other eurozone countries. Eurostat, the European statistical office, calculated an inflation rate in the eurozone of 3.2 percent in October, as against 3.6 percent in September.

Dutch inflation