The consumer price index (CPI) is one of the most important indicators for inflation. 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.
|Year||Month||Year-on-year change (year-on-year % change)|
Tobacco significantly more expensive due to higher excise duty rate
On 1 April 2020, excise duties on tobacco were raised. This higher rate affected consumer prices of tobacco products. In May, tobacco was 12 percent more expensive than in same month last year, while in April the price increase was still 4 percent. This price development has an upward effect on consumer prices. In May, the year-on-year price increase of rolling tobacco was almost 25 percent, while prices of cigarettes were on average 6.8 percent higher. Because retailers still sold stocks of tobacco at old excise duty rates in April and May, the increase in excise duty was not yet fully reflected in the selling prices of tobacco in these months.
Lower motor fuel and clothing prices
Just as in April, prices of motor fuels were significantly lower in May than in the same month last year. In May, motor fuels were 14.1 percent cheaper than one year previously, against a year-on-year decline of 13.4 in April. The price development of clothes also had a downward effect on the consumer price increase.
Price increase in the eurozone down to 0.1 percent
Aside from the consumer price index (CPI), CBS also calculates the European harmonised index of consumer prices (HICP).
In May, HICP-based prices of goods and services in the Netherlands were 1.1 percent up year-on-year, versus 1.0 percent in April. The price increase in the eurozone went further down from 0.3 percent in April to 0.1 percent in May, the lowest level since July 2016.
|year||month||The Netherlands (year-on-year % change)||Euro area (year-on-year % change)|
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 developments in rental property prices.
Implications of the coronavirus crisis for consumer price measurements in May
As a result of government measures, the services of e.g. airlines and restaurants were virtually unavailable in May. As a consequence, for many of these services there were no transactions for which prices could be measured. In line with guidelines from Eurostat, the statistical office of the European Union, CBS chose the most appropriate estimation method for each situation. The product groups within which prices had to be estimated in relation to corona account for around 12 percent of consumptive expenditure.