- Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) was running at 0.4 % in March compared to 1.0 % in February. Core inflation (inflation without energy and unprocessed food) stood at 1.7 % in March.
- The inflation rate based on the consumer price index (CPI) for March stood at 0.6 % compared to 1.1 % in February.
- The sub-indices with the largest upward effect on inflation were meat, rents and restaurants and cafés.
- However, the sub-indices with the largest downward effect on inflation were liquid fuels, motor fuels and gas.
- The impact of the Covid-19/coronavirus on the calculation of the harmonised index of consumer prices for March is limited. The local price collection was almost complete when the measures came into force. Moreover, the majority of the index basket is collected centrally. The transaction data from the largest supermarket chains (“scanner data”) are taken into account since 2016. The impact of the Covid-19 on the calculation of the index for April will be communicated next month.
- The harmonised index of consumer prices of March for the EU Member States will be published by Eurostat on 17 April.
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Inflation based on the European harmonised index of consumer prices (HICP)[1] stood at 0.4 % in March, compared to 1.0 % in February. Inflation based on the harmonised index of consumer prices at constant tax rates (HICP-CT)[2] was also running at 0.4 % in March, compared to 1.0 % in February.
Inflation and effect on inflation for the 12 main groups
Based on the breakdown into 12 main groups, the highest inflation rate in March was measured for “Alcoholic beverages and tobacco” (3.4 %). The lowest inflation rate was measured for “Housing, water and energy” (-4.1 %).
The main group with the largest upward effect on inflation in March was “Food and non-alcoholic beverages” with an effect of 0.4 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 | ||||||||
| Jan/20 | Feb/20 | Mar/20 | Feb/20 | Jan/20 | Feb/20 | Mar/20 | |||
| 0 | Total expenditure | 1000.0 | 1.4 | 1.0 | 0.4 | 0.4 | |||
| 1 | Food and non-alcoholic beverages | 165.0 | 0.9 | 1.7 | 2.4 | 2.4 | -0.1 | 0.1 | 0.4 |
| 2 | Alcoholic beverages and tobacco | 49.7 | 3.5 | 3.2 | 3.4 | 2.8 | 0.1 | 0.1 | 0.2 |
| 3 | Clothing and footwear | 53.2 | 1.6 | 0.4 | 0.3 | 0.3 | -0.2 | 0.0 | 0.0 |
| 4 | Housing, water and energy | 162.8 | -0.4 | -2.4 | -4.1 | -4.1 | -0.4 | -0.7 | -0.9 |
| 5 | Interior decoration and household appliances | 74.1 | 1.6 | 1.7 | 1.6 | 1.6 | 0.0 | 0.0 | 0.1 |
| 6 | Health | 81.5 | 0.6 | 0.6 | 0.6 | 0.6 | -0.1 | 0.0 | 0.0 |
| 7 | Transport | 123.6 | 3.9 | 1.7 | -0.7 | -0.8 | 0.4 | 0.1 | -0.2 |
| 8 | Communication | 32.9 | 0.5 | 0.3 | -1.4 | -1.4 | 0.0 | 0.0 | -0.1 |
| 9 | Recreation and culture | 87.8 | 2.9 | 2.3 | 2.3 | 2.3 | 0.1 | 0.1 | 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 | 3.1 | 3.0 | 1.8 | 1.8 | 0.1 | 0.2 | 0.1 |
| 12 | Various goods and services | 83.7 | 1.2 | 1.5 | 1.7 | 1.7 | 0.0 | 0.0 | 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 second month in a row. It stands at
-11.8 % in March compared to -5.6 % in February and -0.3 % in January. Prices decreased on average by 5.1 % compared to the previous month. The average inflation rate of this aggregate for the last twelve months is
-3.7 %. - The inflation rate for processed food products has gone up for the third month in a row. It stands at 2.6 % in March compared to 2.2 % in February and 1.6 % in January. Prices increased on average by 0.6 % compared to February.
- Inflation for unprocessed food (fruit, vegetables, meat and fish) is on the rise for the fifth month in a row. It stands at 2.8 % in March compared to 1.6 % in February and 1.1 % in January. Prices increased on average by 3.8 % compared to February. The average inflation rate of this aggregate for the last twelve months is 0.0 %.
- Inflation for non-energy industrial goods was running at 1.0 % in March and February, compared to 0.4 % in January. On average, prices remained stable compared to the previous month.
- Inflation for services (including rents) has decreased to 1.9 % in March compared to 2.1 % in February and 2.4 % in January. Prices decreased by 0.4 % on average compared to the previous month.
Core inflation (inflation without energy and unprocessed food) was running at 1.7 % in March, a slight decrease compared to 1.8 % in February. Average core inflation over the last 12 months amounts to 1.6 %. Prices of this subaggregate have decreased by 0.1 % compared to the previous month.
Inflation according to specific aggregates
| Specific aggregates | Weight (‰) | Inflation on annual basis (%) | 12-month average (%) | Monthly change | ||
|---|---|---|---|---|---|---|
| Jan/20 | Feb/20 | Mar/20 | Mar/20 | Mar/20 | ||
| Total expenditure | 1000.0 | 1.4 | 1.0 | 0.4 | 1.0 | -0.4 |
| Fuels and energy sources | 97.4 | -0.3 | -5.6 | -11.8 | -3.7 | -5.1 |
| Processed food products | 171.5 | 1.6 | 2.2 | 2.6 | 1.7 | 0.6 |
| Unprocessed food products | 43.2 | 1.1 | 1.6 | 2.8 | 0.0 | 3.8 |
| Non-energy industrial goods | 267.2 | 0.4 | 1.0 | 1.0 | 1.0 | 0.0 |
| Services | 420.8 | 2.4 | 2.1 | 1.9 | 1.9 | -0.4 |
| HICP without energy and unprocessed food (core inflation) | 859.4 | 1.6 | 1.8 | 1.7 | 1.6 | -0.1 |
Effect of sub-indices on inflation
The largest upward effect on inflation was caused by meat and rents (0.16 percentage point each). Restaurants and cafés had an effect of 0.15 percentage point.
Sub-indices with the largest upward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2020 | March/20 | ||
| 01.1.2 | Meat | 40.6 | 0.16 |
| 04.1 | Rents | 71.1 | 0.16 |
| 11.1.1 | Restaurants and cafés | 69.9 | 0.15 |
The largest downward effect on inflation came from liquid fuels (-0.34 percentage point). Fuels and lubricants and gas had an effect of -0.30 percentage point each.
Sub-indices with the largest downward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2020 | March/20 | ||
| 04.5.3 | Liquid fuels | 12.2 | -0.34 |
| 07.2.2 | Fuels and lubricants | 33.7 | -0.30 |
| 04.5.2 | Gas | 16.1 | -0.30 |
Comparison with neighbouring countries
Since the final HICP of the neighbouring countries will not be published until later, comparisons can only be made based on the first HICP flash estimate for March.
In March, inflation in Belgium was running at 0.4 %, down from the 1.0 % registered in February. The Netherlands registered an inflation rate of 1.1 % in March; a decrease compared to an inflation rate of 1.3 % in February. Inflation in France in March amounted to 0.7 %, a sharp decreased compared to the rate of 1.6 % observed in February. Inflation in Germany in March amounted to 1.3 %, down from the rate of 1.7 % observed in February.
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Since the HICP at constant tax rates for March are not yet published by Eurostat, February is the most recent month to use as a basis for comparison. Belgium's inflation rate based on the HICP-CT stood at 1.0 % in February, down from a rate of 1.3 % in January. Inflation in Germany was running at 1.7 % in February and remained unchanged compared to January. In France, this inflation was 1.4 % in February compared to 1.5 % in January. This inflation in the Netherlands in February amounted to 1.5 %, down from 1.9 % in January.
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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).