Consumer price increase lower in March

10/04/2018 15:00
Statistics Netherlands (CBS) reports that the consumer price index (CPI) was 1.0 percent higher in March than in the same month last year. In February, prices of consumer goods and services were 1.2 percent up.

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 clothes less substantial

The year-on-year increase in consumer prices over March was lower than in February. This is mainly due to price developments of a number of food products, such as meat, dairy, fruit and potatoes. The year-on-year price increase of food was lower for the sixth consecutive month. The price development of clothes drove the inflation rate down as well. However, the price development of mobile phone services, maintenance of private cars and petrol increased the inflation rate.

Rise in Dutch consumer prices 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 1.3 percent in February to 1.0 percent in March. In the eurozone, the price increase of goods and services increased from 1.1 to 1.4 percent. This is mainly due to price developments of food, beverages and tobacco.

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.