Inflation rate rises to 0.6 percent

08/12/2016 15:00
© Hollandse Hoogte
The inflation rate in the Netherlands according to the consumer price index (CPI) rose to 0.6 percent in November, Statistics Netherlands (CBS) reports. In October consumer goods and services were 0.4 percent more expensive than one year previously.

Inflation (CPI)

Holiday trips abroad drive inflation rate up

More expensive package holidays abroad had an upward effect on inflation in November with prices up 5.6 percent on last year, compared to a 2.6 percent lower rate in October. Developments in the prices of clothing and food pushed up inflation as well. Prices of vegetables and milk increased in particular, contributing to the rising inflation rate.

Inflation without energy, food, alcohol and tobacco also higher

Energy and food prices fluctuate 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 rose to 0.9 percent in November. In October the rate stood at 0.6 percent.

CPI for underlying clusters

Dutch as well as eurozone inflation rate rising

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

The HICP-based inflation rate in the Netherlands increased from 0.3 percent in October to 0.4 percent in November. The eurozone inflation rate went up from 0.5 percent to 0.6 percent, keeping the Dutch rate below the eurozone level. The main cause for the rising eurozone inflation rate are the higher prices of food products, alcohol and tobacco.

Inflation (HICP)

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 higher than the HICP-based inflation rate.

Sources

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