Inflation further down to 0.6 percent

08/10/2015 15:00

According to the consumer price index (CPI), inflation was 0.6 percent in September. Statistics Netherlands reports that in August consumer prices were 0.8 percent higher than one year previously.  Petrol price developments had a considerable downward effect on inflation, although the rate is still higher than in January, when the lowest level in 27 years was recorded.

Inflation (CPI)

Petrol price helps bring down inflation

Just as in August, the lower inflation rate was predominantly caused by petrol price developments. Petrol prices were 12.5 percent down in September from the same month last year, averaging 1.51 euros per litre. In August, petrol prices fell by 7.5 percent on an annual basis. Airline ticket prices also pushed down inflation. In September, airline ticket prices were about the same as one year previously. In August, they were 8.2 percent up from last year.

Fuel prices declined most rapidly over the past year

Apart from petrol, LPG and diesel fuel were also much cheaper than last year. The price of LPG fell most, by almost one-quarter. Potato prices soared by 27 percent. Mobile phone prices also increased by one-quarter relative to last year.

Inflation without energy, food, alcohol and tobacco stable at 1.3 percent

Prices of energy and food tend to vary considerably over time and alcohol and tobacco prices often rise as a result of higher excise rates. Therefore, inflation is often considered without taking these product groups into account. According to this criterion, inflation remained unchanged in September at 1.3 percent. In January, the price increase was 0.9 percent. With the exception of house rents and energy, prices of most goods and services increased more than in January.

Inflation (CPI) and price developments underlying clusters

Dutch inflation rate above eurozone level

In addition to the consumer price (CPI), CBS also compiles the European harmonised price index (HICP).

According to the HICP, the Dutch inflation rate fell to 0.3 percent in September and remained higher than the eurozone average. The eurozone rate fell to - 0.1 percent. The negative rate is caused by the sharp drop in energy prices across the eurozone. Prices of other goods and services, on the other hand, went up. See also: Lower energy prices push down eurozone inflation rate.

The HICP is calculated according to the European harmonised method to facilitate comparison between the various EU member states. Price index figures for the eurozone and the European Union as a whole are calculated based on the HICPs of the individual member states. The European Central Bank uses these figures as a basis for its monetary policy.

Inflation (HICP) The Netherlands and Eurozone

Unlike the CPI, the HICP does not take into account the costs related to home ownership.  In the Dutch CPI, these costs are calculated on the basis of rent levels. However, because the increase in rental prices is higher than the price increase for other goods and services, the Dutch inflation rate based on the CPI is higher than when based on the HICP.

Sources