Dutch inflation rises slightly, while service prices soar

Investing.com – The Netherlands’ inflation rate in February rose to 2.3% year-on-year, up from 2.2% in January, driven by an increase in core inflation to 2.7%. The latest data shows that this rise was mainly due to an unexpected acceleration in service sector inflation.

Service prices jumped from a year-on-year 3.6% in January to 4.2% in February. In recent months, wage costs and housing rents have been factors pushing up service inflation, but more detailed data is needed to determine which specific services contributed to the acceleration in February.

The Netherlands’ harmonized HICP inflation rate increased, while the domestic-focused CPI remained stable at 2.4% year-on-year. The CPI benefited from deflation in foreign consumption.

Other inflation indicators show signs of slowing. Inflation for food, beverages, alcohol, and tobacco decreased from 2.0% in January to 1.4% in February, consistent with price trends in international raw food wholesale markets.

Inflation for non-energy industrial goods fell from 0.6% to 0.4%, supported by a sharp decline in import prices for goods. For eight consecutive months, the year-on-year price change for imported products has been negative.

Energy prices, including fuels, remained at levels similar to 12 months ago, with a 0.3% inflation rate in January.

A survey by the European Commission shows that Dutch business expectations for future selling prices fell to their lowest in four months in February.

However, military strikes in Iran could push up oil and natural gas prices, increasing consumers’ fuel and energy bills. This conflict also raises risks of rising transportation costs and supply chain disruptions.

As energy prices face new upward pressures, the HICP inflation rate may exceed the 2% target in 2026.

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