Inflation rate down to 1.4 percent in July
|Year||Month||Year-on-year change (year-on-year % change)|
Minor increase in rental property prices
Inflation was lower in July than in June. This is partly due to the modest developments of rental property prices. Based on preliminary numbers, rental property prices increased by 0.8 percent in July 2021 compared to the previous year. In June, rental property prices were up by 2.9 percent year-on-year.
The regulations on rental property prices have been adjusted by the Ministry of the Interior and Kingdom Relations. For example, as of July 1, rental prices of regulated rental property were no longer allowed to increase. In the previous year, the maximum increase in rental prices of regulated rental property was 6.6 percent, depending on income level.
Additionally, the annual rent increase for non-regulated rental property has been capped. This increase is fixed for three years at the inflation rate plus 1 percentage point. On September 6, CBS will publish the final housing rent development results along with further details.
Developments in holiday prices push inflation down
In addition to rental property prices, prices of going on holiday also had a downward effect on inflation. A stay in a bungalow park cost 6.3 percent less in July than in the previous year, while the year-on-year price increase in June stood at 3.7 percent. In July last year, prices were at their highest level ever recorded. Package deals for holidays abroad were 4.4 percent cheaper in July than in the previous year.
Gas and electricity more expensive
Gas and electricity were more expensive in July and had an upward effect on inflation. The price of energy has been rising since August 2020. The variable costs for the supply of electricity was higher by 15.8 percent than one year previously, up from 6.3 percent in June. Gas was 12 percent more expensive than the previous year, up from 5.1 percent in June.
In addition to rising energy prices, the developments in the pricing of food products also drove up inflation.
CPI: Major contributions to year-on-year change July (percentage point) June (percentage point) All items 1.4 2 Housing, water and
0.7 0.88 Transport 0.33 0.37 Miscellaneous goods
0.26 0.32 Furnishing and household
0.14 0.11 Alcoholic beverages and
0.06 0.04 Clothing and footwear 0.04 0.14 Restaurants and hotels -0.04 0.13 Food and non-alcoholic
-0.09 -0.18 Recreation and culture -0.16 0.09
|July (percentage point)||June (percentage point)|
|Housing, water and |
|Miscellaneous goods |
|Furnishing and household |
|Alcoholic beverages and |
|Clothing and footwear||0.04||0.14|
|Restaurants and hotels||-0.04||0.13|
|Food and non-alcoholic |
|Recreation and culture||-0.16||0.09|
Increase HICP in euro area higher than in the Netherlands
Aside from the consumer price index (CPI), CBS also calculates the European harmonised consumer price index (HICP). According to the European HICP, consumer goods and services in the Netherlands were 1.4 percent more expensive in July than in the same month last year, up from 1.7 percent in June. Inflation in the euro area rose from 1.9 to 2.2 percent and was higher than inflation in the Netherlands for the second month in a row.
|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 euro area 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.
The main conceptual difference between the CPI and the HICP for the Netherlands is that the HICP, unlike the CPI, 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 July
Due to the government's COVID-19 countermeasures, some services were either limited or unavailable in July, such as air travel or larger events. As a result, there were no transactions for these services that allowed for price measurements. In accordance with the Eurostat guidelines, CBS opted for the most appropriate estimation method in each situation. The product groups that required price estimates as a result of the coronavirus measures account for about 1 percent of consumer spending.
The coronavirus pandemic has significantly changed consumers’ spending patterns. The change in consumption patterns will affect inflation in 2021.
- StatLine - Consumer prices
- Custom - CPI; Overview COVID-19 adjustments, as from April 2020
- Dossier - Business Cycle
- Longread - The impact of the corona crisis on compiling the CPI