For the first time in nearly thirty years of negative inflation in the Netherlands – NU.nl

The inflation rate in July fell to minus 0.3 percent, was the Statistical Central Bureau (CBS) announced on Thursday.

Inflation was mainly pushed in July because food, automotive fuels and air travel became cheaper . In contrast dress was on sale this year discounted less than in July last year, which had an increasing effect on the average price level.

Because the price movements of energy and power fluctuates and prices of alcohol and tobacco often rising through tax measures, the statistics office also looks at inflation excluding these products. The according to this measure of inflation in July stood at 0.3 percent. In the previous two months, this was 0.5 percent.

European method

On the basis of the harmonized European method, the drop in consumer prices last month, from minus 0.2 percent in June , to minus 0.6 percent. Thus, the inflation further fall below the euro area level in the Netherlands.

According to the CBS, the price increase in the Netherlands for some time ” clear ” below the long term average of 2 percent. Goods are cheaper since 2014, while the rise in prices of services from the second half of 2015 has become increasingly smaller. Over the past two and a half years, inflation in almost all months was less than 1 percent. This is the longest continuous period of almost thirty years when inflation was less than 1 percent.

Spin

According to economic theory provides a prolonged decline in prices, or deflation, making consumers may start to postpone purchases. If prices fall, it can actually be cheaper to just make a purchase in six months.

There is a risk of a negative spiral. Consumers spend less, so businesses have less to spend

By:. ANP / NU.nl