Dutch inflation was 2.9 percent in October. This is the highest inflation rate in the last four years. In September, inflation was 2.3 percent. 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.
The rise in inflation can largely be attributed to the increase in the highest VAT rate. On 1 October 2012, this rate was increased from 19 to 21 percent. As a result, prices for petrol and natural gas rose substantially. Consumers also had to pay more for phone and internet services.
Besides the increase in VAT, developments in food prices also contributed to the increase in inflation. As a result of poorer crops, prices of fruit, vegetables and potatoes were considerably higher than in October 2011.
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 was 3.3 percent in October, as against 2.5 percent in the previous month. Eurostat, the European statistical office, calculated an inflation rate of 2.5 percent for the eurozone, i.e. 0.1 of a percentage point down on September. 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
More figures can be found in the Business cycle dossier.
For more information on Dutch inflation, see Statistics Netherlands’ online video on YouTube.
For more information on economic indicators, see the Economic Monitor.