Inflation substantially down

Dutch inflation was 2.3 percent in November, substantially less than October’s 2.8 percent. For the third month in a row, inflation was substantially down on the previous month.

Lower petrol and diesel prices were the main cause for the drop in inflation. In November, petrol was more than 13 percent cheaper than one year previously. Diesel prices were 7 percent lower. In October, petrol prices were nearly 1 percent lower than one year previously, and diesel prices nearly 9 percent higher.

The drop in the inflation rate was tempered by an excise increase on tobacco products. On 1 July, the excise duty on cigarettes was raised. The effects were hardly felt until November, because stocks sold at old prices were still available. It lasted until November for tobacco products to become much more expensive than one month previously; the prices rose by more than 8 percent.

In November, the structure of inflation changed considerably. Petrol and diesel prices had a downward effect on inflation of 0.4 percentage points. In October, they had an upward effect of 0.2 percentage points. The contribution of tobacco and alcoholic drinks on inflation rose from 0.1 percentage points in October to 0.3 percentage points in November. Food and soft drinks contributed 0.5 percentage points, as against 0.7 percentage points one month previously. Housing, water and energy contributed most substantially. With 0.8 percentage points, the contribution of this category was the same as in October.

The harmonised consumer price index (HICP) allows comparison between the member states of the European Union (EU). According to the HICP, Dutch inflation was 1.9 percent in November, i.e. 0.6 percentage points down on September. Not only in the Netherlands the inflation rate dropped considerably. Eurostat, the European statistical office, calculated an inflation rate in the eurozone of 2.1 percent in November, as against 3.2 percent in October. The decline in inflation in the eurozone was significantly higher than the decline in the Netherlands, mainly because gas and electricity prices are linked more directly to oil prices. Another cause was the increase in excise duty on tobacco products.

Inflation is calculated as the increase of the consumer price index (CPI) relative to the same month in the previous year.

Dutch inflation

Dutch inflation