The low gasoline price is one of the reasons that inflation stood at 0 percent. Photo: Reuters / BART SIZE
Inflation in the Netherlands fell in January to the lowest level since 1987. The increase compared to last year amounted to zero percent. In December, inflation was 0.7 percent. This has the Central Bureau of Statistics (CBS) announced this morning.
According to the common European definition, which differs from the Dutch national figure, was there last month even deflation: prices fell under these harmonized index of consumer prices (HICP) by 0.7 percent from a year earlier. Throughout the euro area prices fell by 0.6 percent.
In particular, the sharp decline in crude oil prices was reflected in price developments. Gasoline was almost 13 percent lower than a year ago, and gas prices fell by 2.8 percent. CBS also reported falling prices in clothing: the mild winter means less spending on winter clothes, causing prices Sale extra under pressure. Also, many foods were cheaper.
Economists usually speak only of deflation as falling prices continue long. That chance is quite large, because fuel prices in the first months of this year probably remain much lower compared to last year. The oil price decline only started in July last year.
Persistent deflation is seen as detrimental to the economy. Consumers can postpone their spending in anticipation of lower prices in the future, and debts are more difficult to resolve off.
The European Central Bank announced last month to pump EUR 1.140 billion in the economy of the euro area deflation in the euro zone to avert. This decision is supported by the figures this morning
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