- Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) was running at 0.0 % in April compared to 0.4 % in March. Core inflation (inflation without energy and unprocessed food) stood at 1.6 % in April.
- The inflation rate based on the consumer price index (CPI) for April stood at 0.6 % as in March.
- The sub-indices with the largest upward effect on inflation were rents, meat and restaurants and cafés.
- However, the sub-indices with the largest downward effect on inflation were motor fuels, liquid fuels and gas.
- The current measures due to the COVID-19 also had an impact on the calculation of the index. For sectors where physical outlets are closed, data are collected online when there is no other data source. For sectors that are completely closed (restaurants, hairdressers, travels, etc.) prices are carried forward with or without a seasonal correction factor. These methods are in line with the methodological recommendations established by Eurostat in consultation with the National Statistical Institutes (Statbel in Belgium). More information is available here.
- The harmonised index of consumer prices of April for the EU Member States will be published by Eurostat on 20 May.
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Inflation based on the European harmonised index of consumer prices (HICP)[1] stood at 0.0 % in April, compared to 0.4 % in March. Inflation based on the harmonised index of consumer prices at constant tax rates (HICP-CT)(HICP-CT)[2] was also running at 0.0 % in April, compared to 0.4 % in March.
Inflation and effect on inflation for the 12 main groups
Based on the breakdown into 12 main groups, the highest inflation rate in April was measured for “Food and non-alcoholic beverages” and “alcoholic beverages and tobacco” (each with 3.3 %). The lowest inflation rate was measured for “Housing, water and energy” (-5.0 %).
The main group with the largest upward effect on inflation in April was “Food and non-alcoholic beverages” with an effect of 0.6 percentage point. The largest downward effect was measured for “Housing, water and energy” (-0.9 percentage point).
Inflation[3]and effect[4] on inflation for the overall HICP and 12 main groups
| Productgroup | Weight (‰) | Inflation on annual basis (%) | Effect on inflation (percentage point) | ||||||
|---|---|---|---|---|---|---|---|---|---|
| HICP | HICP-CT | ||||||||
| Feb/20 | Mar/20 | Apr/20 | Apr/20 | Feb/20 | Mar/20 | Apr/20 | |||
| 0 | Total expenditure | 1000.0 | 1.0 | 0.4 | 0.0 | 0.0 | |||
| 1 | Food and non-alcoholic beverages | 165.0 | 1.7 | 2.4 | 3.3 | 3.3 | 0.1 | 0.4 | 0.6 |
| 2 | Alcoholic beverages and tobacco | 49.7 | 3.2 | 3.4 | 3.3 | 3.3 | 0.1 | 0.2 | 0.2 |
| 3 | Clothing and footwear | 53.2 | 0.4 | 0.3 | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 |
| 4 | Housing, water and energy | 162.8 | -2.4 | -4.1 | -5.0 | -5.0 | -0.7 | -0.9 | -0.9 |
| 5 | Interior decoration and household appliances | 74.1 | 1.7 | 1.6 | 1.8 | 1.8 | 0.0 | 0.1 | 0.1 |
| 6 | Health | 81.5 | 0.6 | 0.6 | 0.7 | 0.7 | 0.0 | 0.0 | 0.1 |
| 7 | Transport | 123.6 | 1.7 | -0.7 | -3.5 | -3.5 | 0.1 | -0.2 | -0.5 |
| 8 | Communication | 32.9 | 0.3 | -1.4 | -2.6 | -2.6 | 0.0 | -0.1 | -0.1 |
| 9 | Recreation and culture | 87.8 | 2.3 | 2.3 | 1.7 | 1.7 | 0.1 | 0.2 | 0.2 |
| 10 | Education | 5.0 | 1.5 | 1.5 | 1.5 | 1.5 | 0.0 | 0.0 | 0.0 |
| 11 | Hotels, cafés and restaurants | 80.7 | 3.0 | 1.8 | 1.5 | 1.8 | 0.2 | 0.1 | 0.1 |
| 12 | Various goods and services | 83.7 | 1.5 | 1.7 | 1.6 | 1.7 | 0.0 | 0.1 | 0.1 |
Inflation according to specific aggregates
The overall HICP can be broken down into five specific aggregates which together form the total expenditure.
- The inflation rate for fuels and energy sources has gone down for the third month in a row. It stands at
-16.8 % in April compared to -11.8 % in March and -5.6 % in February. Prices decreased on average by 6.9 % compared to the previous month. The average inflation rate of this aggregate for the last twelve months is
-5.5 %. - The inflation rate for processed food products has gone up for the fourth month in a row. It stands at 2.7 % in April compared to 2.6 % in March and 2.2 % in February. Prices increased on average by 0.7 % compared to March.
- Inflation for unprocessed food (fruit, vegetables, meat and fish) is on the rise for the sixth month in a row. It stands at 5.7 % in April compared to 2.8 % in March and 1.6 % in February. Prices increased on average by 1.9 % compared to March. The average inflation rate of this aggregate for the last twelve months is 0.6 %.
- Inflation for non-energy industrial goods was running at 1.0 % in the lasts 3 months. On average, prices remained stable compared to the previous month.
- Inflation for services (including rents) has decreased to 1.6 % in April compared to 1.9 % in March and 2.1 % in February. Prices decreased by 0.4 % on average compared to the previous month.
Core inflation (inflation without energy and unprocessed food) was running at 1.6 % in April, a slight decrease compared to 1.7 % in March. Average core inflation over the last 12 months amounts to 1.6 %. Prices of this subaggregate have increased by 0.4 % compared to the previous month.
Inflation according to specific aggregates
| Specific aggregates | Weight (‰) | Inflation on annual basis (%) | 12-month average (%) | Monthly change | ||
|---|---|---|---|---|---|---|
| Feb/20 | Mar/20 | Apr/20 | Apr/20 | Apr/20 | ||
| Total expenditure | 1000.0 | 1.0 | 0.4 | 0.0 | 0.8 | -0.2 |
| Fuels and energy sources | 97.4 | -5.6 | -11.8 | -16.8 | -5.5 | -6.9 |
| Processed food products | 171.5 | 2.2 | 2.6 | 2.7 | 1.8 | 0.7 |
| Unprocessed food products | 43.2 | 1.6 | 2.8 | 5.7 | 0.6 | 1.9 |
| Non-energy industrial goods | 267.2 | 1.0 | 1.0 | 1.0 | 1.0 | 0.0 |
| Services | 420.8 | 2.1 | 1.9 | 1.6 | 1.9 | 0.4 |
| HICP without energy and unprocessed food (core inflation) | 859.4 | 1.8 | 1.7 | 1.6 | 1.6 | 0.4 |
Effect of sub-indices on inflation
The largest upward effect on inflation was caused by rents (0.21 percentage point). Meat provided an upward effect of 0.19 percentage point. Finally, restaurants and cafés had an effect of 0.16 percentage point.
Sub-indices with the largest upward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2020 | Apr/20 | ||
| 04.1 | Rents | 71.1 | 0.21 |
| 01.1.2 | Meat | 40.6 | 0.19 |
| 11.1.1 | Restaurants, cafés and similar services | 69.9 | 0.16 |
The largest downward effect on inflation came from motor fuels and lubricants (-0.63 percentage point). Liquid fuels had a downward impact of -0.53 percentage point. Finally, gas provided a downward effect of -0.26 percentage point.
Sub-indices with the largest downward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2020 | Apr/20 | ||
| 07.2.2 | Fuels and lubricants | 33.7 | -0.63 |
| 04.5.3 | Liquid fuels | 12.2 | -0.53 |
| 04.5.2 | Gas | 16.1 | -0.26 |
Information on the inflation and price movements for commonly purchased products
The table below shows the inflation for a number of commonly purchased products (food, non-alcoholic beverages, maintenance products, animal food and personal care products). It also shows the monthly price change in April compared to March.
| COICOP | Name | Weight in the basket (on 1000) | Inflation Mar/20 | Inflation Apr/20 | Price change Apr vs March |
|---|---|---|---|---|---|
| 1 | Food and non-alcoholic beverages | 157.1 | 2.4% | 3.3% | 0.6% |
| 01.1 | Food products | 143.7 | 2.5% | 3.4% | 0.8% |
| 01.2 | Non-alcoholic beverages | 13.4 | 1.7% | 2.1% | -2.1% |
| 05.6.1 | Non-durable household goods | 10.8 | 1.5% | 3.4% | 2.9% |
| 05.6.1.1 | Cleaning and maintenance products | 6.5 | 2.3% | 5.1% | 3.9% |
| 05.6.1.2 | Other non-durable small household articles | 4.3 | 0.4% | 0.8% | 1.3% |
| 09.3.4 | Products for pets | 7.2 | 2.1% | 2.5% | 0.0% |
| 12.1.3 | Other appliances, articles and products for personal care | 14.4 | 0.5% | 0.9% | 1.3% |
| 12.1.3.1 | Non-electrical appliances for personal care | 1.1 | 3.2% | 3.1% | -1.0% |
| 12.1.3.2 | Articles for personal hygiene and wellness, esoteric products and beauty products | 13.3 | 0.3% | 0.7% | 1.5% |
Certain structural causes can explain the generally higher inflation for food products. Therefore, the increase cannot simply be attributed to a Covid-19 effect. We came from a period of low inflation for food products; the inflation in 2019 for those products was the lowest since 2014. Other countries also register an increase of the inflation for food products. For example, the inflation rate for food and non-alcoholic beverages in April amounted to 3.4 % in the Netherlands, 4.2 % in Germany and 4.1% in France. In Belgium, this inflation stood at 3.3 % in April.
The reason for the food inflation increase in April compared to March is mainly due to a high inflation for fresh vegetables and fruit (mainly citrus fruit, strawberries and pears) and pigmeat and derived products. For example, there is a lower stock for pears (not due to the Covid-19). For citrus fruit, the reason is a combination of increased demand and reduced supply due to poor weather conditions in southern European countries. It should be noted that this inflation is also unstable in normal circumstances, as there is no stable seasonal pattern. A Covid-19 effect may have further reduced supply from southern Europe, but this cannot be established with certainty. The high inflation for pigmeat is mainly due to the increased demand from China on the European market, due to the African swine fever. This phenomenon also has an impact in other countries that also register high inflation for the same product groups. For example, the inflation rate for pigmeat in April amounted to 14.2 % in the Netherlands compared to 6.1 % in Belgium. The increase in inflation for fresh seafood is mainly due to shrimps, whose wholesale prices have risen since the end of last year and are now reflected in consumer prices. The partial ban on discounts has less impact on the global food inflation because it concerns only a subset of product groups (pizzas, biscuits, preserves, ...) in which quantity discounts are traditionally granted quite often.
For maintenance products, the increase in inflation (5.1 %) can be explained, in part, by last year's period of low inflation (the average inflation rate was even negative for 2019) and, in part, by the lower supply of (quantity) discounts. For these products, a series of (quantity) discounts were granted just prior to the lockdown and ban on discounts starting from 18 March. Given the specific nature of these products (long shelf life), it is also possible that consumers have built up reserves. We see a slow reintroduction of discounts for these products, after the partial lifting of the ban on discounts since the 3rd of April. The ban on discounts also had an impact on a number of other product groups, such as non-alcoholic beverages, but less pronounced than for maintenance products.
Meanwhile, the ban on discounts has been completely lifted by a ministerial decree of 30th April which entered into force on the 4th May. It will obviously take some time before new discount actions can be put in place.
Comparison with neighbouring countries
In April, inflation in Belgium was running at 0.0 %, down from the 0.4 % registered in March. The Netherlands registered an inflation rate of 1.0 % in April; a slight decrease compared to an inflation rate of 1.1 % in March. Inflation in France in April amounted to 0.5 %, down from the rate of 0.8 % observed in March. Inflation in Germany in April amounted to 0.8 %, down from the rate of 1.3 % observed in March.
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Since the HICP at constant tax rates for April are not yet published by Eurostat, March is the most recent month to use as a basis for comparison. Belgium's inflation rate based on the HICP-CT stood at 0.4 % in March, down from a rate of 1.0 % in February. Inflation in Germany in March amounted to 1.3 %, a decrease compared to the rate of 1.7 % observed in February. In France, this inflation was 0.6 % in March compared to 1.4 % in February. This inflation in the Netherlands in March amounted to 1.3 %, also down from 1.5 % in February.
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[1]In addition to the national consumer price index (CPI), Statbel also calculates a European harmonised consumer price index (Harmonised Index of Consumer Prices, HICP). The HICP is used to compare inflation rates in the EU Member States. To this end, the applied expenditure approach and methods have been coordinated as much as possible and laid down in European regulations. The results of the CPI and HICP are not the same. This is mainly due to a different weighting and composition of the basket of goods and services on which these indices are based.
The HICP is also used by the European Central Bank in its monetary policy. Additionally, the HICP is used to determine to what extent a Member State meets the inflation criteria set in the Treaty on European Union.
Differences between the HICP and the current CPI are:
- The weighting of the basket of goods and services in the HICP is mainly based on the national accounts. At lower detailed levels the Household Budget Survey is used. The CPI mostly uses the Household Budget Survey at all levels.
- The reference population of the HICP consists of private households (including tourists in Belgium) and institutional households (e.g. retirement homes and nursing homes). In the CPI, this population currently consists of private households with a reference person under a maximum age.
- The HICP uses the concept of domestic expenditure: expenditure in Belgium by the reference population. The CPI uses the concept of national expenditure: expenditure by the reference population irrespective of the location.
- Seasonal adjustment is not applied in the HICP, but is applied in the CPI to travels abroad and stays in holiday villages.
- Sales periods in the CPI are systematically spread over 6 months, but are included in the same month in the HICP.
- Current prices for domestic heating oil are used in the HICP calculation. A weighted 12-month average is applied in the CPI calculation.
[2] The HICP-CT is calculated in the same way as the regular HICP, but the prices in this index are calculated based on constant tax rates. This index therefore reflects the theoretically potential effect of changes in indirect tax rates (such as VAT or excise duties) on measured inflation. However, this is a theoretical effect, since it presupposes that tax changes are immediately and entirely reflected in prices paid by consumers.
[3] Inflation on annual basis measures the price changes between the current month and the same month of the year before. A 12-month average compares the average HICP of the last 12 months with the average of the previous 12 months. A monthly change compares the price levels of the last two months.
[4]An effect on inflation shows the changes on the inflation rate by including this sub-index in the CPI calculation. The effect not only takes the weight of the sub-index into account, but it also takes into account whether the sub-index inflation is higher or lower than that of the total expenditure (overall HICP).