Holidays and petrol account for higher inflationHigher prices for foreign package holidays and Dutch holiday park accommodations drove inflation up. School holidays and the holiday period for construction workers started late this year. As a result, the high-season period in August was longer than last year and prices tend to rise during the high season.
Petrol price developments also pushed inflation up. Petrol was 7.3 percent cheaper than twelve months ago, but - on an annual basis - July’s price decrease was more substantial (10.9 percent). On the other hand, lower food prices kept inflation down. Potato prices plummeted.
Inflation rate excluding energy, food, alcohol and tobacco also higherAs prices of energy <link> and food products tend to vary considerably and alcohol and tobacco prices are frequently raised as a result of higher excise duty rates, inflation is also calculated excluding these product groups. According to this criterion, inflation was 0.8 percent in August, versus 0.4 percent in July.
July’s inflation rate adjustedThe final CPI inflation figure for July 2016 was -0.2 percent, versus -0.3 percent according to the first preliminary calculation. On the basis of new, more recent information, the average rent increase in July turned out to be higher than initially published. For more information, the reader is referred to the news release about house rents in 2016, which was published simultaneously.
Gap between Dutch and eurozone inflation rate narrowing
In addition to the consumer price index (CPI), Statistics Netherlands (CBS) also calculates the European harmonised price index (HICP).
The HICP-based inflation rate in the Netherlands rose considerably, from -0.6 percent in July to 0.1 percent in August. The eurozone rate remained stable at 0.2 percent. The Dutch rate is still below the eurozone level, but the gap has narrowed.
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.