Dutch inflation rate negative for first time in 30 years

“The last time that inflation was below zero was in December 1987,” the Central Statistics Office said.

The news came after three months of stagnation when the country’s inflation rate had remained unchanged at zero per cent in April, May and June.

The negative inflation rate means that last month “for the first time since December 1987 goods and services were cheaper for consumers” than in the same period a year earlier, the CBS said.

Weakening oil prices and the falling cost of holidays helped push the rate down, aided by lower prices for clothing in the July sales, the office said.

Discounting the fluctuating energy and food costs, as well as sales of alcohol and tobacco, which are taxed, the inflation rate for July stood at 0.3 per cent.

But the CBS cautioned that negative inflation was not the same as deflation.

The lowest ever recorded inflation rate in The Netherlands was in January 1987 when the consumer price index sank to -1.13 per cent.

CBS said the country’s inflation rate was now one of the lowest in the eurozone.

The European Central Bank last month refrained from adding more monetary stimulus to boost consumer prices in the eurozone, disappointing markets.

Slow eurozone growth has seen inflation slide in and out of negative territory, threatening a dangerous downward spiral of falling prices and wages.

The ECB aims to get inflation back to its long-term target of just below two per cent, a level it deems healthy for growth.