Inflation rate up to 1.7 percent in July

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.

Holiday park accommodations and private housing rental prices push up inflation rate

Price developments of holiday park accommodations had an upward effect on inflation. In July, prices were 11.8 percent higher than in July 2019, while in June they were up by 1.4 percent year-on-year.

The development of private rental prices paid by tenants had an upward effect as well. Based on provisional figures, the average increase was 2.9 percent in July 2020, i.e. a modest rise from 2.5 percent in July 2019. On 7 September 2020, CBS will publish final figures with more details.

Travelling and food have a downward effect

In contrast to price developments of holiday park accommodations, prices of airfares and package holidays abroad had a downward effect on inflation. The price development of food also lowered the inflation rate. Prices were 1.9 percent higher in July, while in June they were up by 2.7 percent year-on-year.

Inflation gap between the Netherlands and the eurozone narrowing

Aside from the consumer price index (CPI), CBS also calculates the European harmonised index of consumer prices (HICP).

In July, HICP-based prices of goods and services in the Netherlands were 1.6 percent up year-on-year, versus 1.7 percent in June. The price increase in the eurozone went up from 0.3 percent in June to 0.4 percent in July. As a result, the difference between the HICP in the Netherlands and in the eurozone has become slightly smaller.

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 July

Due to coronavirus-related government measures, in July the full extent of services by e.g. airlines and events was limited or unavailable. As a consequence, there were no transactions for many of these services 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 due to coronavirus measures account for around 2 percent of consumptive expenditure.