Netherlands' 2016 inflation on lowest level in 30 years

Inflation in the Netherlands increased from 0.6 percent to 1.0 percent in December, according to Statistics Netherlands on Thursday. But despite this increase, the Dutch inflation over 2016 was at its lowest level in nearly 30 years. Over 2016 inflation in the Netherlands increased only 0.3 percent. The last time inflation was so limited was in 1987, according to the statistics office.

Falling electricity prices particularly had a dampening effect on inflation last year. Rent increase was also lower than in 2015 and airline tickets and vacations abroad were cheaper. Consumers also paid less for bank services.

The fact that inflation increased at all can mostly be attributed to the price development of gas - unlike electricity, tax on gas increased. More expensive clothing and a smaller decrease in the price of gasoline than in 2015 also had an uplifting effect.

The low inflation the Netherlands is facing can also be seen across the European Union. In most all EU countries the value of money has long been below the European Central Bank's target level of just under 2 percent. This can partly be attributed to oil prices plummeting over recent years. The oil price seemed to recover somewhat over 2016, so its effect on inflation should start to disappear.