Inflation down slightly in August

According to Statistics Netherlands’ consumer price index, inflation in the Netherlands was 3.3 percent in August, 0.2 of a percent point lower than in July. The slight fall was caused by prices of fresh vegetables and flowers and plants. Dutch inflation according to the European harmonised index was 3.8 percent.

Inflation back at May level
Inflation fell to 3.3 percent from July to August, putting it back it the same level as in May this year. This was the lowest value since January 2001. Inflation fell substantially between May 2001 and May 2002, from 4.9 percent to 3.3 percent. Since May, however, the inflation figure has not shown a clear direction.

The slight fall in the rate of inflation in August was mainly caused by price developments of fresh vegetables. In June 2002 prices were on average 11 percent higher than in June 2001; in July 2002 they were 19 percent higher than in July last year. In August this had fallen to 3 percent. Price rises for garden items, flowers and plants were also smaller: in July these cost 8 percent more than twelve months previously, in August only 3 percent more.

Clothes prices pushed up inflation slightly. Higher prices were reported for women’s clothes in particular. It is not possible at the moment to establish whether the effect of the summer sales contributed to this.

Prices 0.2 percent higher in August
Prices rose by an average 0.2 percent between July and August 2002. Higher prices were reported for fresh fruit and vegetables, and telephone rats were also higher. Clothes and shoes cost more, especially women’s clothes and clothing fabrics.

Following a hefty increase in July, an equally remarkable fall in prices of fresh vegetables was reported in August. Potatoes, flowers and plants were also cheaper.

Derived consumer price index
Inflation according to the derived consumer price index for employee households in the low income bracket was 3.2 percent in August, 0.2 of a percent point lower than in July. This index is often used to adjust government rates, collective wage agreements and other contracts.

Rent increase on average 2.9 percent
House rents were put up by an average 2.9 percent on 1 July this year. This is the definite result of Statistics Netherlands’ rent survey. The figure is the same as the provisional figure published last month.

Inflation according to the European norm
Statistics Netherlands not only compiles the national consumer price index, but also the European harmonised consumer price index (HICP) for the Netherlands. This index makes up part of the inflation rate of the Eurozone, an official guideline for the monetary policy of the European Central Bank. In August 2002 inflation in the Netherlands according to the HICP was 3.8 percent, the same as in July. The combination of a decreasing rate of inflation according to the national CPI and an unchanged figure according to the HICP can be attributed to differences in rounding.

Average inflation in the Eurozone was 1.9 percent, 0.1 of a percent point up on the June figure. The Netherlands had the second highest rate of inflation in the European Union, after Ireland.

The August figures for the individual countries of the Eurozone and of the European Union will be published by Eurostat, the statistical office of the EU, on 18 September. Eurostat expects inflation for the Eurozone as a whole in August to increase from 1.9 to 2.1 percent.

(source: Statististics Netherlands)

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