Inflation rate down to 1.4 percent in July

05/08/2021 15:00

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Statistics Netherlands (CBS) reports that the consumer price index (CPI) was 1.4 percent higher in July than in the same month last year. The inflation rate stood at 2.0 percent in June. The developments in rental property prices in particular contributed to the lower inflation.

Consumer price index (CPI)
Year	Month	Year-on-year change (year-on-year % change)
2015	January	0
2015	February	0.2
2015	March	0.4
2015	April	0.6
2015	May	1.1
2015	June	1
2015	July	1
2015	August	0.8
2015	September	0.6
2015	October	0.6
2015	November	0.7
2015	December	0.7
2016	January	0.6
2016	February	0.6
2016	March	0.6
2016	April	0
2016	May	0
2016	June	0
2016	July	-0.2
2016	August	0.2
2016	September	0.1
2016	October	0.4
2016	November	0.6
2016	December	1
2017	January	1.7
2017	February	1.8
2017	March	1.1
2017	April	1.6
2017	May	1.1
2017	June	1.1
2017	July	1.3
2017	August	1.4
2017	September	1.5
2017	October	1.3
2017	November	1.5
2017	December	1.3
2018	January	1.5
2018	February	1.2
2018	March	1
2018	April	1.1
2018	May	1.7
2018	June	1.7
2018	July	2.1
2018	August	2.1
2018	September	1.9
2018	October	2.1
2018	November	2
2018	December	2
2019	January	2.2
2019	February	2.6
2019	March	2.8
2019	April	2.9
2019	May	2.4
2019	June	2.7
2019	July	2.5
2019	August	2.8
2019	September	2.6
2019	October	2.7
2019	November	2.6
2019	December	2.7
2020	January	1.8
2020	February	1.6
2020	March	1.4
2020	April	1.2
2020	May	1.2
2020	June	1.6
2020	July	1.7
2020	August	0.7
2020	September	1.1
2020	October	1.2
2020	November	0.8
2020	December	1
2021	January	1.6
2021	February	1.8
2021	March	1.9
2021	April	1.9
2021	May	2.1
2021	June	2
2021	July	1.4

Consumer price index (CPI)
Year	Month	Year-on-year change (year-on-year % change)
2015	January	0
2015	February	0.2
2015	March	0.4
2015	April	0.6
2015	May	1.1
2015	June	1
2015	July	1
2015	August	0.8
2015	September	0.6
2015	October	0.6
2015	November	0.7
2015	December	0.7
2016	January	0.6
2016	February	0.6
2016	March	0.6
2016	April	0
2016	May	0
2016	June	0
2016	July	-0.2
2016	August	0.2
2016	September	0.1
2016	October	0.4
2016	November	0.6
2016	December	1
2017	January	1.7
2017	February	1.8
2017	March	1.1
2017	April	1.6
2017	May	1.1
2017	June	1.1
2017	July	1.3
2017	August	1.4
2017	September	1.5
2017	October	1.3
2017	November	1.5
2017	December	1.3
2018	January	1.5
2018	February	1.2
2018	March	1
2018	April	1.1
2018	May	1.7
2018	June	1.7
2018	July	2.1
2018	August	2.1
2018	September	1.9
2018	October	2.1
2018	November	2
2018	December	2
2019	January	2.2
2019	February	2.6
2019	March	2.8
2019	April	2.9
2019	May	2.4
2019	June	2.7
2019	July	2.5
2019	August	2.8
2019	September	2.6
2019	October	2.7
2019	November	2.6
2019	December	2.7
2020	January	1.8
2020	February	1.6
2020	March	1.4
2020	April	1.2
2020	May	1.2
2020	June	1.6
2020	July	1.7
2020	August	0.7
2020	September	1.1
2020	October	1.2
2020	November	0.8
2020	December	1
2021	January	1.6
2021	February	1.8
2021	March	1.9
2021	April	1.9
2021	May	2.1
2021	June	2
2021	July	1.4

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
energy 0.7 0.88
Transport 0.33 0.37
Miscellaneous goods
and services 0.26 0.32
Furnishing and household
equipment 0.14 0.11
Alcoholic beverages and
tobacco 0.06 0.04
Clothing and footwear 0.04 0.14
Restaurants and hotels -0.04 0.13
Food and non-alcoholic
beverages -0.09 -0.18
Recreation and culture -0.16 0.09
CPI: Major contributions to year-on-year change
July (percentage point) June (percentage point)
All items 1.4 2
Housing, water and
energy 0.7 0.88
Transport 0.33 0.37
Miscellaneous goods
and services 0.26 0.32
Furnishing and household
equipment 0.14 0.11
Alcoholic beverages and
tobacco 0.06 0.04
Clothing and footwear 0.04 0.14
Restaurants and hotels -0.04 0.13
Food and non-alcoholic
beverages -0.09 -0.18
Recreation and culture -0.16 0.09

CPI: Major contributions to year-on-year change
	July (percentage point)	June (percentage point)
All items	1.4	2

Housing, water and energy	0.7	0.88
Transport	0.33	0.37
Miscellaneous goods and services	0.26	0.32
Furnishing and household equipment	0.14	0.11
Alcoholic beverages and tobacco	0.06	0.04
Clothing and footwear	0.04	0.14
Restaurants and hotels	-0.04	0.13
Food and non-alcoholic beverages	-0.09	-0.18
Recreation and culture	-0.16	0.09

CPI: Major contributions to year-on-year change
	July (percentage point)	June (percentage point)
All items	1.4	2

Housing, water and energy	0.7	0.88
Transport	0.33	0.37
Miscellaneous goods and services	0.26	0.32
Furnishing and household equipment	0.14	0.11
Alcoholic beverages and tobacco	0.06	0.04
Clothing and footwear	0.04	0.14
Restaurants and hotels	-0.04	0.13
Food and non-alcoholic beverages	-0.09	-0.18
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.

Harmonised Index of Consumer Prices (HICP)
year	month	The Netherlands (year-on-year % change)	Euro area (year-on-year % change)
2015	January	-0.7	-0.6
2015	February	-0.5	-0.3
2015	March	-0.3	-0.1
2015	April	0	0.2
2015	May	0.7	0.6
2015	June	0.5	0.5
2015	July	0.8	0.5
2015	August	0.4	0.4
2015	September	0.3	0.2
2015	October	0.4	0.4
2015	November	0.4	0.1
2015	December	0.5	0.3
2016	January	0.2	0.3
2016	February	0.3	-0.1
2016	March	0.5	0
2016	April	-0.2	-0.3
2016	May	-0.2	-0.1
2016	June	-0.2	0
2016	July	-0.6	0.2
2016	August	0.1	0.2
2016	September	-0.1	0.4
2016	October	0.3	0.5
2016	November	0.4	0.6
2016	December	0.7	1.1
2017	January	1.6	1.7
2017	February	1.7	2
2017	March	0.6	1.5
2017	April	1.4	1.9
2017	May	0.7	1.4
2017	June	1	1.3
2017	July	1.5	1.3
2017	August	1.5	1.5
2017	September	1.4	1.6
2017	October	1.3	1.4
2017	November	1.5	1.5
2017	December	1.2	1.3
2018	January	1.5	1.3
2018	February	1.3	1.1
2018	March	1	1.4
2018	April	1	1.2
2018	May	1.9	2
2018	June	1.7	2
2018	July	1.9	2.2
2018	August	1.9	2.1
2018	September	1.6	2.1
2018	October	1.9	2.3
2018	November	1.8	1.9
2018	December	1.8	1.5
2019	January	2	1.4
2019	February	2.6	1.5
2019	March	2.9	1.4
2019	April	3	1.7
2019	May	2.3	1.2
2019	June	2.7	1.3
2019	July	2.6	1
2019	August	3.1	1
2019	September	2.7	0.8
2019	October	2.8	0.7
2019	November	2.6	1
2019	December	2.8	1.3
2020	January	1.7	1.4
2020	February	1.3	1.2
2020	March	1.1	0.7
2020	April	1	0.3
2020	May	1.1	0.1
2020	June	1.7	0.3
2020	July	1.6	0.4
2020	August	0.3	-0.2
2020	September	1	-0.3
2020	October	1.2	-0.3
2020	November	0.7	-0.3
2020	December	0.9	-0.3
2021	January	1.6	0.9
2021	February	1.9	0.9
2021	March	1.9	1.3
2021	April	1.7	1.6
2021	May	2	2
2021	June	1.7	1.9
2021	July	1.4	2.2

Harmonised Index of Consumer Prices (HICP)
year	month	The Netherlands (year-on-year % change)	Euro area (year-on-year % change)
2015	January	-0.7	-0.6
2015	February	-0.5	-0.3
2015	March	-0.3	-0.1
2015	April	0	0.2
2015	May	0.7	0.6
2015	June	0.5	0.5
2015	July	0.8	0.5
2015	August	0.4	0.4
2015	September	0.3	0.2
2015	October	0.4	0.4
2015	November	0.4	0.1
2015	December	0.5	0.3
2016	January	0.2	0.3
2016	February	0.3	-0.1
2016	March	0.5	0
2016	April	-0.2	-0.3
2016	May	-0.2	-0.1
2016	June	-0.2	0
2016	July	-0.6	0.2
2016	August	0.1	0.2
2016	September	-0.1	0.4
2016	October	0.3	0.5
2016	November	0.4	0.6
2016	December	0.7	1.1
2017	January	1.6	1.7
2017	February	1.7	2
2017	March	0.6	1.5
2017	April	1.4	1.9
2017	May	0.7	1.4
2017	June	1	1.3
2017	July	1.5	1.3
2017	August	1.5	1.5
2017	September	1.4	1.6
2017	October	1.3	1.4
2017	November	1.5	1.5
2017	December	1.2	1.3
2018	January	1.5	1.3
2018	February	1.3	1.1
2018	March	1	1.4
2018	April	1	1.2
2018	May	1.9	2
2018	June	1.7	2
2018	July	1.9	2.2
2018	August	1.9	2.1
2018	September	1.6	2.1
2018	October	1.9	2.3
2018	November	1.8	1.9
2018	December	1.8	1.5
2019	January	2	1.4
2019	February	2.6	1.5
2019	March	2.9	1.4
2019	April	3	1.7
2019	May	2.3	1.2
2019	June	2.7	1.3
2019	July	2.6	1
2019	August	3.1	1
2019	September	2.7	0.8
2019	October	2.8	0.7
2019	November	2.6	1
2019	December	2.8	1.3
2020	January	1.7	1.4
2020	February	1.3	1.2
2020	March	1.1	0.7
2020	April	1	0.3
2020	May	1.1	0.1
2020	June	1.7	0.3
2020	July	1.6	0.4
2020	August	0.3	-0.2
2020	September	1	-0.3
2020	October	1.2	-0.3
2020	November	0.7	-0.3
2020	December	0.9	-0.3
2021	January	1.6	0.9
2021	February	1.9	0.9
2021	March	1.9	1.3
2021	April	1.7	1.6
2021	May	2	2
2021	June	1.7	1.9
2021	July	1.4	2.2

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.

Sources

StatLine - Consumer prices
Custom - CPI; Overview COVID-19 adjustments, as from April 2020

Minor increase in rental property prices

Developments in holiday prices push inflation down

Gas and electricity more expensive

Increase HICP in euro area higher than in the Netherlands

Implications of the coronavirus crisis for consumer price measurements in July

Sources

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