Iran war pushes Dutch inflation to 2.8 percent in April

Daily life in the Netherlands became 2.8 percent more expensive in April than a year earlier, Statistics Netherlands (CBS) reported based on a quick estimate. Inflation came out slightly higher than the 2.7 percent in March.

Due to the war in Iran, which began late in February, oil and gas prices rose sharply in March and April. Economists fear that a prolonged conflict in the Middle East could cause inflation to rise further due to higher energy prices. In February, before the war began, inflation stood at 2.4 percent.

Energy and motor fuel prices rose by 7.8 percent in April, following a 6.5 percent rise in March. Food, beverages, and tobacco became 1.5 percent more expensive, following a 2 percent price increase in March.

Prices in the service sector rose by 3.6 percent, following a 3.8 percent increase a month earlier. Industrial goods became 0.3 percent more expensive, following a rise of 0.4 percent in March.

Compared to March, consumer prices rose by 1.1 percent in April. CBS did add a caveat, however. Temporary seasonal influences can be significant in a month-to-month comparison, such as clothing placed on sale as the seasons change. These markdowns do not constitute a permanent decrease.

Based on the European measurement method, inflation in the Netherlands came in at 2.5 percent in April, compared to 2.6 percent in March. The method agreed upon within the European Union does not take into account the costs of owning a home. The Dutch method includes these costs,

Later this morning, the European statistics office Eurostat will release preliminary figures on consumer prices in the eurozone for April. In March, inflation in the euro area rose to 2.6 percent, from 1.9 percent in February.

The inflation figure will be released shortly before the European Central Bank (ECB) makes its interest rate decision. Although the ECB has indicated it stands ready to raise interest rates if the inflation shock caused by the war gets out of hand, economists expect the central bank to wait and see how the situation develops and leave interest rates unchanged at 2 percent on Thursday.