Inflation rate gap between the Netherlands and eurozone widens

Over the past six months, the gap between the inflation rate in the Netherlands and in the eurozone has widened. This is chiefly due to the fact that price increases for food, rents and energy were more moderate in the Netherlands than in the other countries of the eurozone.

Inflation (HICP)

Dwindling meat prices in the Netherlands

Food prices went up less in the Netherlands than in the other countries that have adopted the euro as their currency. This is mainly attributable to slightly lower meat prices in the latter half of 2007. In the same period, meat prices rose in other euro countries. Lower meat prices are caused by fierce competition between the Dutch supermarkets. Higher meat prices are only partially passed on to the consumer.

Meat prices

Moderate rent increase

In the latter half of 2007, the rent increase in the Netherlands was far more moderate than in most of the other countries of the eurozone. The increase was lower than in the first six months of last year. The maximum rent increase over the period 1 July 2007–1 July 2008 is 1.4 percent. In the Netherlands, the rent increase is inflation-related and rent is adjusted only once a year.

Rents

Energy prices widen inflation gap

In the last quarter of 2007, the inflation gap between the Netherlands and the eurozone has become wider due to more moderate price increases for energy in the Netherlands. Prices for natural gas and electricity are usually adjusted on 1 January and 1 July. In other countries in the eurozone price adjustments are more frequent.

Energy prices

Marleen Geerdinck