Dutch inflation dips into negative territory

Statistics Netherlands reports that the CPI-based inflation rate in the Netherlands fell to - 0.3 percent in July. For the first time since December 1987, consumer goods and services are cheaper than one year previously.

Inflation (CPI)
Inflation (CPI)
 CPI
2010 Jan0.8
2010 Feb0.8
2010 Mar1
2010 Apr1.1
2010 May1
2010 Jun0.8
2010 Jul1.6
2010 Aug1.5
2010 Sep1.6
2010 Oct1.6
2010 Nov1.6
2010 Dec1.9
2011 Jan2
2011 Feb1.9
2011 Mar2
2011 Apr2.1
2011 May2.3
2011 Jun2.3
2011 Jul2.6
2011 Aug2.6
2011 Sep2.7
2011 Oct2.6
2011 Nov2.6
2011 Dec2.4
2012 Jan2.5
2012 Feb2.5
2012 Mar2.5
2012 Apr2.4
2012 May2.1
2012 Jun2.1
2012 Jul2.3
2012 Aug2.3
2012 Sep2.3
2012 Oct2.9
2012 Nov2.8
2012 Dec2.9
2013 Jan3
2013 Feb3
2013 Mar2.9
2013 Apr2.6
2013 May2.8
2013 Jun2.9
2013 Jul3.1
2013 Aug2.8
2013 Sep2.4
2013 Oct1.6
2013 Nov1.5
2013 Dec1.7
2014 Jan1.4
2014 Feb1.1
2014 Mar0.8
2014 Apr1.2
2014 May0.8
2014 Jun0.9
2014 Jul0.9
2014 Aug1
2014 Sep0.9
2014 Oct1.1
2014 Nov1
2014 Dec0.7
2015 Jan0
2015 Feb0.2
2015 Mar0.4
2015 Apr0.6
2015 May1.1
2015 Jun1
2015 Jul1
2015 Aug0.8
2015 Sep0.6
2015 Oct0.6
2015 Nov0.7
2015 Dec0.7
2016 Jan0.6
2016 Feb0.6
2016 Mar0.6
2016 Apr0
2016 May0
2016 Jun0
2016 Jul-0.3

Average rent increase 1.8 percent

Dutch house rents are annually raised in July. The average residential rent increase was 1.8 percent in July 2016, versus 2.4 percent in July 2015, which had a downward effect on inflation.

Price developments in the food sector also keep inflation down

In July, year-on-year food prices rose 0.5 percent, as against 1.4 percent in June. This also kept inflation down. Lower petrol prices and cheaper package holidays and airfares also drove inflation down. On the other hand, clothing prices fell less sharply during this year’s summer sales than in July 2015, which drove inflation up.

Inflation excluding, energy, food, alcohol and tobacco also marginally lower

Price developments for energy and food vary strongly and alcohol and tobacco prices are frequently raised as a result of higher excise duties. Therefore, inflation is also measured without taking these product groups into account. According to this criterion, the rate in July was 0.3 percent, versus 0.5 percent in May and June.

Inflation (CPI) and price developments underlying clusters
Inflation (CPI) and price developments underlying clusters
 May 2016June 2016July 2016
Inflation excl.0.50.50.3
Goods-0.4-0.6-0.9
Energy-7.7-7.1-8.3
Food, alcohol and tobacco1.61.80.9
Goods excl. 1.10.20.6
Services0.40.80.4

Excl. = Without energy, food, alcohol and tobacco

Inflation in the Netherlands below eurozone level

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

The HICP inflation rate in the Netherlands fell substantially, from -0.2 percent in June to -0.6 percent in July. The eurozone inflation rate rose from 0.1 to 0.2 percent. As a result, the gap between the Dutch rate of inflation and the eurozone rate became wider. Across the eurozone, food, alcohol and tobacco prices increased inflation.

Inflation (HICP)
Inflation (HICP)
 Netherlandseurozone
2010 Jan0.40.9
2010 Feb0.40.9
2010 Mar0.71.6
2010 Apr0.71.6
2010 May0.41.7
2010 Jun0.21.5
2010 Jul1.31.7
2010 Aug1.21.6
2010 Sep1.41.9
2010 Oct1.41.9
2010 Nov1.41.9
2010 Dec1.82.2
2011 Jan1.92.3
2011 Feb22.4
2011 Mar1.82.7
2011 Apr2.12.8
2011 May2.32.7
2011 Jun2.32.7
2011 Jul3.22.6
2011 Aug3.22.5
2011 Sep33
2011 Oct2.83
2011 Nov2.63
2011 Dec2.52.8
2012 Jan2.92.7
2012 Feb2.92.7
2012 Mar2.92.7
2012 Apr2.82.6
2012 May2.52.4
2012 Jun2.52.4
2012 Jul2.62.4
2012 Aug2.62.6
2012 Sep2.52.6
2012 Oct3.32.5
2012 Nov3.22.2
2012 Dec3.42.2
2013 Jan3.22
2013 Feb3.21.9
2013 Mar3.21.7
2013 Apr2.81.2
2013 May3.11.4
2013 Jun3.21.6
2013 Jul3.11.6
2013 Aug2.81.3
2013 Sep2.41.1
2013 Oct1.30.7
2013 Nov1.20.9
2013 Dec1.40.8
2014 Jan0.80.8
2014 Feb0.40.7
2014 Mar0.10.5
2014 Apr0.60.7
2014 May0.10.5
2014 Jun0.30.5
2014 Jul0.30.4
2014 Aug0.40.4
2014 Sep0.30.3
2014 Oct0.40.4
2014 Nov0.30.3
2014 Dec-0.1-0.2
2015 Jan-0.7-0.6
2015 Feb-0.5-0.3
2015 Mar-0.3-0.1
2015 Apr00
2015 May0.70.3
2015 Jun0.50.2
2015 Jul0.80.2
2015 Aug0.40.1
2015 Sep0.3-0.1
2015 Oct0.40.1
2015 Nov0.40.1
2015 Dec0.50.2
2016 Jan0.20.3
2016 Feb0.3-0.2
2016 Mar0.50
2016 Apr-0.2-0.2
2016 May-0.2-0.1
2016 Jun-0.20.1
2016 Jul-0.60.2

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 on the basis of the HICPs of the separate member states. The European Central Bank uses these figures to formulate its monetary policy.

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. Because the rent increase is higher than the average price increase of other goods and services, the CPI-based Dutch inflation rate is currently somewhat below the level of the HICP-based inflation rate.

Sources

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