Inflation rate substantially higher
- Inflation rate jumps from 0.8 to 1.6 percent
- Natural gas price contributes to inflation increase
- Second lowest rent increase in forty years
The inflation rate in July rose to 1.6 percent. The rate has not been this high since May 2009. The most recent figures released by Statistics Netherlands show that natural gas prices had a considerable upward effect on inflation.
Natural gas prices caused inflation to soar in July. In the Netherlands, prices of gas and electricity are adjusted on a biannual basis in January and July. In July this year, natural gas prices increased as a result of higher crude oil prices in the past six months. In July 2009, the largest gas price decrease since 1987 was recorded. The downward effect on inflation lasted for one year, but has worn off now.
House rents increased by an average 1.6 percent in July, the second lowest rent increase in more than forty years. The annual rent increase was only lower in 2007. In July 2009, rents still increased by an average 2.8 percent. The Ministery of Housing, Spacial Planning and the Environment allowed a maximum rent increase of 1.2 percent in 2010. In exceptional cases, a higher rent increase is allowed. As a result, the average rent increase exceeds 1.2 percent. The extremely low increase in 2010 relative to 2009 had a downward effect on inflation.
Dutch inflation according to the European harmonised method (HICP) has risen to 1.3 percent. According to Eurostat, inflation in the eurozone has risen to 1.7 percent in July. The inflation rate in the eurozone remains higher than in the Netherlands, but the gap is narrowing.
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