Consumer prices 1.3 percent up in December

Statistics Netherlands (CBS) reports that the consumer price index (CPI) was 1.3 percent higher in December than in the same month one year previously. In November, prices of consumer goods and services were 1.5 percent up. The inflation rate over 2017 averaged 1.4 percent.

The consumer price index (CPI) is an important indicator for inflation, but is not the only one. It is an index for price changes in a basket of consumer goods and services, such as groceries, clothing, petrol, rent and insurance premiums. Inflation is a broader term which covers more than consumer goods and services; for example, prices of owner-occupied houses, manufactured products, shares and gold are also subject to change.

Price increase motor fuels smaller

The year-on-year increase in consumer prices over December was smaller than in November. This is mainly due to price developments of motor fuels and food.

Compared to December 2016, the price increase of motor fuels in December 2017 was 1.5 percent, while in November 2017 the year-on-year price increase was 6.1 percent. The price development of clothes, on the other hand, drove the inflation rate up.

Rise in Dutch consumer prices slightly lower than in eurozone

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

HICP-based prices in the Netherlands decreased from 1.5 percent in November to 1.2 percent in December. In the eurozone, the price increase of goods and services fell from 1.5 to 1.4 percent.

The HICP is compiled according to the European harmonised method in order to facilitate comparison between the various EU member states. Price indices for the eurozone and the European Union as a whole are calculated on the basis of the HICPs of the individual member states. The European Central Bank (ECB) 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.

Sources