In June, the Dutch inflation rate dropped for the third month in a row to reach 1.4 percent, i.e. 0.2 percentage points down on May. Especially prices of food and clothes had a downward effect on inflation. Inflation is defined as the increase of the consumer price index (CPI) relative to the same month in the previous year.
Higher costs of housing, water and energy accounted for 0.9 percentage points of the inflation in June. Tobacco and alcoholic drinks contributed 0.3 percentage points, whereas transport prices had a downward effect on inflation of 0.5 percentage points.
The harmonised consumer price index (HICP) allows comparison between the inflation rates in the various member states of the European Union (EU). According to the HICP, Dutch inflation in June was also 1.4 percent, but without the excise duty increase on car fuels, tobacco and beer, the inflation rate in the Netherlands would have been 1.0 percent.
According to Eurostat, the EU statistical office, the Eurozone experienced a deflation rate of 0.1 percent in June. This is the first time deflation has hit the Eurozone. Only one year ago, the EU inflation rate stood at 4 percent, the highest rate since the introduction of the euro.
In addition to the excise duty increase, energy prices also contributed to the gap between the Dutch and the Eurozone inflation rate. In most European countries, the effect of changes in oil prices is felt much sooner than the Netherlands. Food prices also contributed to the difference between the Dutch and the Eurozone inflation rate.