According to figures released by Statistics Netherlands today, inflation in the Netherlands fell to 0.9 percent in September. In August it was still 1 percent. Lower air ticket prices in particular pushed down inflation. In the first three quarters of 2014, inflation was 1 percent on average.
It is the fifth time this year that Dutch inflation is below 1 percent. Inflation has been relatively low since the beginning of the year: for the first time since 1989 it was 1 percent on average in the first three quarters of the year. In its most recent estimate for 2014, the Netherlands Bureau for Economic Policy Analysis is forecasting an inflation rate of 1 percent.
The reason inflation is so low at the moment is that prices of a substantial number of consumer products and services have risen only by very little or not at all. Telephone and internet services have even become a lot cheaper. Housing costs were higher on the other hand.
Lower air ticket prices push down inflation
It was mainly prices of air tickets that had a downward effect on inflation this month. Air tickets were 2.9 percent cheaper in September than in the same month last year. In August they still cost a lot more than twelve months previously.
Dutch inflation slightly lower than in eurozone
The European harmonised consumer price index (HICP) is used to compare inflation rates of EU countries. One important difference between the HICP and the national inflation rate calculated in the Netherlands is that the HICP does not take into account costs connected with an own home.
Dutch inflation according to the HICP was 0.2 percent in September. This is slightly lower than the eurozone average of 0.3 percent. According to the ECB, inflation below but close to 2 percent denotes price stability. Eurozone inflation has been below 1 percent for over a year now.