Inflation rate in October unchanged

The Dutch inflation rate reached 3.4 percent in October 2002, which is the same as in September. This is shown by the latest consumer price index by Statistics Netherlands. Food contributed less to inflation this month, whereas car fuels and telephone rates contributed more. Dutch inflation according to the European harmonised index was 3.6 percent in October, which is 0.1 percentage point less than in September.

Inflation stable at 3.4 percent
In October, inflation reached 3.4 percent, the same rate as in September. Earlier this year inflation started to fall, reaching 3.3 percent in May, after which inflation stayed between 3.3 and 3.5 percent.

Price developments in food, and non-alcoholic beverages had a downward effect on the inflation rate in October. Fresh vegetable prices fell compared to last month and are lower than a year ago. In September fresh vegetable prices were still 10 percent higher than a year ago. Potato prices saw an even greater price change. In October, potatoes were 20 percent cheaper than in October last year, while in September they were 7 percent more expensive than in September 2001.

Upward pressure on inflation came from the price developments in car fuels. These were 4.6 percent more expensive than in October last year. In September, the difference with a year ago was 1.5 percent. Car fuels were slightly cheaper in October this year than they were last year, but last year there was a much greater price drop between September and October so that the year-on-year difference is much greater now.

Telephone rates were also responsible for upward pressure on inflation, being 4 percent higher than a year ago.

Modest decrease in prices in October
Prices fell on average by 0,1 percent in October 2002 on September 2002, identical to the price drop of October 2001 on September 2001. Price drops in October were observed mainly in food and non-alcoholic beverages. Fresh fruit and vegetables, potatoes and meat were cheaper. There was also a slight price decrease in car fuels. Higher prices were observed for shoes and telephone rates.

Derived consumer price index
Dutch inflation according to the derived consumer price index for households of employees on a low income reached 3.2 percent in October, down 0.1 percent on September. This index is often used for adjusting government rates, collective wage agreements and other contracts.

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 October 2002 inflation in the Netherlands according to the HICP was 3.6 percent, 0.1 of a percent point lower than in September.

The average inflation in the Eurozone was 2.1 percent in September, the same rate as in August. Eurostat expects inflation for the Eurozone as a whole to increase from 2.1 to 2.2 percent in October. The Dutch inflation rate has been above the Eurozone average ever since May 2000. The biggest difference occurred during the fall of 2001, when the Dutch inflation rate was 3.1 percent higher than the Eurozone average for months. The difference became smaller in the course of 2002. In January, Dutch inflation was still 2.2 percent above the Eurozone average, when the inflation rate in the Netherlands was 4.9%, against 2.7% in the Eurozone. The difference was reduced to 1.4 percent in October 2002.

Eurostat, the statistical office of the EU, will publish the October figures for the individual countries of the Eurozone and of the European Union on 14 November.

(source: Statistics Netherlands)

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