Inflation rate considerably down

Dutch inflation was 2.1 percent in May 2012, i.e. 0.3 percentage points down from April. The decrease is mainly due to petrol price developments. Inflation is defined as the increase in the consumer price index (CPI) in a particular month compared to the same month in the previous year.

Petrol prices were still over 4 percent higher than twelve months previously, but the price increase was less substantial than in April (more than 7 percent).

Apart from the petrol price, prices of clothes, drinks (alcoholic as well as soft drinks), energy and cosmetic products also had a downward effect on inflation. Prices for clothes, drinks and energy were still up on one year previously, but the price increase was less substantial than in the preceding month. Prices of cosmetic products were marginally down on May 2011, whereas in April prices of these products were higher than one year previously.

Prices of housing, water, energy and transport contributed 0.7 and 0.3 percentage points respectively to May’s inflation rate of 2.1 percent. Other goods and services also contributed to inflation, though to a lesser extent.

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 method, the Dutch inflation rate in May was 2.5 percent versus 2.8 percent in April. Eurostat, the European statistical office, calculated an inflation rate of 2.4 percent for the eurozone, as against 2.6 percent in April. The level of inflation in the eurozone is one of the main guidelines for the European Central Bank (ECB) to change or refrain from changing the interest rate. According to the ECB, prices in the eurozone are stable, if the inflation rate is close to 2 percent.

Dutch inflation rate

Dutch inflation rate

More figures can be found in the Business cycle dossier.

For more information on Dutch inflation, see Statistics Netherlands’ online video on YouTube.