Dutch annual inflation rate down to 5.7 percent in June; Groceries up 12.6 percent

The annual rate at which prices are rising in the Netherlands decreased in June compared to a month earlier. Inflation this month was 5.7 percent, compared to 6.1 percent in May. Statistics Netherlands (CBS) reports this on the basis of a quick initial estimate. The statistics office used a new method for measuring and including energy prices in the inflation rate for the first time.

In the old method, price developments were measured on the basis of new energy contracts. The new method uses transaction data from energy suppliers, so that the rates of longer-term energy contracts can also be taken into account. This ensures a more accurate inflation figure, according to the CBS.

The average price increase of products in supermarkets amounted to 12.6 percent this month, compared to 12.8 percent in May. Prices of industrial goods rose by 7.3 percent, compared to 8.9 percent a month earlier. Services were also 5.7 percent more expensive, compared to 6.1 percent in May.

On the other hand, energy, including motor fuels, became 16.3 percent cheaper. That followed a price drop of 18.5 percent in May.

In order to make a fair comparison with other European countries, Statistics Netherlands also provided inflation figures according to the European method. This is different in several ways, and does not take housing rental prices into account. Using the European method, the annual inflation rate stood at 6.4 percent, compared to 6.8 percent in May.

Later in the day, the European statistics agency Eurostat will release inflation figures for the entire eurozone. In May, inflation in the euro area cooled to 6.1 percent on an annual basis. Economists polled by the Bloomberg news service expected inflation to cool further to 5.6 percent in June.

As inflation is still above the 2 percent target, the European Central Bank (ECB) is expected to continue raising interest rates. ECB policymakers will meet again in July. ECB President Christine Lagarde indicated earlier this week that the battle against inflation is not yet over and interest rates will likely go up again by a quarter of a percentage point next month.