The inflation rate in the Netherlands has fallen to below zero for the first time in almost 30 years, the national statistics office CBS said on Thursday.

The July inflation rate hit -0.3% in July, the first time a pre-determined basket of goods and services cost less year on year since December 1987.

The retail price index in July was pressured by lower rental increases and lower prices for petrol and holidays, the CBS said. Food, which had risen 1.4% year on year was up 0.5% in July, which also helped lower inflation.

However, clothing was not discounted to the same extent and helped to offset the shift to deflation, the CBS said.

Below 1%

The Dutch rate of inflation has been 0 for the previous three months and below 1% for the past year.

The Netherlands and the eurozone have been hit by low inflation for three years and that is symptomatic of the low economic growth since the financial crisis, the CBS said. People have become more cautious about spending money and have less money to spend, leading prizes to go down.

Calculated according to European guidelines (HCIP), the Dutch rate of inflation fell to -0.6% in July. The HCIP figures do not include the cost of housing. In the eurozone as a whole, the July inflation rate was 0.2%.

Economists tend to define a brief dip below zero as ‘negative inflation’, to differentiate between what they think will be a temporary temporary spell of falling prices due to one-off factors from outright deflation.