Inflation rate rises to 1.0 percent

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The inflation rate in the Netherlands according to the consumer price index (CPI) rose to 1.0 percent in December, Statistics Netherlands (CBS) reports, reaching the highest rate since August 2015. In November consumer goods and services were 0.6 percent more expensive than one year previously. The inflation rate over 2016 averaged 0.3 percent, the lowest increase in consumer prices in nearly 30 years.

Higher motor fuel prices drive inflation up

The inflation rate in December was 0.4 percentage point higher than in November, mainly on account of increased motor fuel prices. The consumer price for a litre of petrol at the filling station was 1.55 euros. The price of petrol reached its highest level in more than one and a half years and was 9 eurocents above the level in December 2015. Clothes also became more expensive, contributing to a higher inflation rate.

These upward pressures were offset by price developments in December of mobile phones and package holidays abroad.

Inflation without energy, food, alcohol and tobacco remains the same

Energy and food prices fluctuate strongly and alcohol and tobacco prices are frequently raised as a result of higher excise duties. Therefore, inflation is also measured without taking these product groups into account. According to this criterion the rate was 0.9 percent in December, the same as in November. In October the rate stood at 0.6 percent.

Dutch as well as eurozone inflation rate rising

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

The HICP-based inflation rate in the Netherlands increased from 0.4 percent in November to 0.7 percent in December. The eurozone inflation rate went up from 0.6 percent to 1.1 percent, keeping the Dutch rate below the eurozone level. The main cause for the rising eurozone inflation rate are the higher energy and food prices.

The Harmonised Index of Consumer Prices (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 separate member states. The European Central Bank 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. Since rents have increased more than the average price of other goods and services, the CPI-based Dutch inflation rate is currently somewhat higher than the HICP-based inflation rate.

Sources

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