Inflation rate down to 2.0 percent in June

Tobacco and motor fuels lower inflation

Inflation was lower in June than in May. This is partly due to the price development of tobacco. Tobacco products were 2.9 percent more expensive in June than in the same month last year, while in May this was still 8.3 percent. The effect of increased excise duties on cigarettes and rolling tobacco in the spring of 2020 was no longer reflected in inflation as of June.

Motor fuels also had a downward effect on inflation. They were 17.4 percent more expensive than last year, versus 19.8 percent in May. However, motor fuels were more expensive in June 2021 than in May 2021. The average price of a litre of Euro 95 increased from 1,773 to 1,793 euros. However, the price increase between May and June 2020 was greater.

Gas and electricity more expensive

Gas and electricity were more expensive in June and had an upward effect on inflation. The variable costs for the supply of electricity and gas increased. Gas was 5.1 percent more expensive than one year previously, while in May this was 3.3 percent. The price increase of electricity rose from 3.0 percent in May to 6.3 percent in June.

Increase HICP in the Netherlands higher than in euro area

Aside from the consumer price index (CPI), CBS also calculates the European harmonised index of consumer prices (HICP). In June, consumer goods and services in the Netherlands according to the European harmonised consumer price index (HICP) were 1.7 percent more expensive than twelve months previously. This was 2.0 percent in May. Inflation in the euro area fell from 2.0 to 1.9 percent, and was higher than inflation in the Netherlands for the first time since December 2018.

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 June

Due to coronavirus-related government measures, in June some services, e.g. by airlines and events, were either limited or unavailable. As a consequence, there were no transactions for these services that allowed for price measurements. According to Eurostat guideline, CBS has chosen the most appropriate estimation method in each situation. The product groups that required price estimates due to the coronavirus measures account for around 1 percent of consumptive expenditure.

The coronavirus crisis has significantly changed consumers' spending patterns. The change in consumption pattern will affect inflation in 2021.