Inflation increases slightly and stands at 0.60 %

Consumer price index of June 2020

• Inflation increases from 0.48 % to 0.60 % in June.
• The consumer price index this month increases by 0.07 point or 0.06 %.
• Inflation based on the health index declined from 1.11 % to 0.94 %.
• The smoothed health index was running at 107.88 points in June.
• The most significant price increases in June were registered for motor fuels and bundled telecommunication services. However, alcoholic beverages, fish and seafood, airplane tickets and meat have had a decreasing effect on the index.
• The current measures due to the COVID-19 had a very small impact on the calculation of the index. For sectors that are completely closed or sectors where no representative price is available, 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). The objective is to distort as little as possible the global inflation rate. More information are available here. In practice, this means that for the month of June there is an increasing effect on the index for holiday villages due to the carry forward of prices with last year’s seasonal correction factor.

The consumer price index was running at 109.52 points in June 2020. It has increased by 0.07 point over the month. Inflation has gone up to 0.60 % from 0.48 %. The health index loses 0.05 point and is now at 110.05 points. Inflation based on the health index has gone down from 1.11 % to 0.94 %. The most significant price increases were registered for motor fuels and bundled telecommunication services. However, alcoholic beverages, fish and seafood, airplane tickets and meat have had a decreasing effect on the index.

The consumer price index has increased by 0.07 point or 0.06 % in June 2020 and now stands at 109.52 points, against 109.45 points in May 2020 (2013=100).

The health index has gone down by 0.05 point to 110.05 points in June, compared to 110.10 points in May. The smoothed health index was running at 107.88 points in June. The next central index for public service and social benefits is set at 109.34 points.

The products with the largest upward effect in June were motor fuels and bundled telecommunication services. However, alcoholic beverages, fish and seafood, airplane tickets and meat provided the largest downward pressure compared to last month. The most important trends this month are:

(*) consequence of the carry forward of prices with a seasonal correction factor

In June, prices for motor fuels increased by 6.7 % on average compared to last month. Prices of bundled telecommunication services increased by 0.8 % on average. The price increases for telecommunications are partly due to the expiry of temporary actions due to the covid crisis (e.g. more data, more call minutes, etc.).

Alcoholic beverages became on average 4.4 % less expensive compared to last month. Fish and seafood are on average 3.3 % less expensive compared to the previous month. Prices for airplane tickets have gone down by 6.4 % this month. Meat has become on average 0.7 % less expensive.

Inflation now stands at 0.60 %, as against 0.48 % in May and 0.57 % in April. Inflation based on the health index amounted to 0.94 % this month compared to 1.11 % in May and 1.14 % in April. Inflation without energy has decreased to 1.68 % in June compared to 2.05 % last month and 2.02 % in April. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 1.41 % in June, compared to 1.63 % in May and 1.58 % in April.

Food inflation (including alcoholic beverages) stands at 3.24 %, compared to 4.10 % in the previous month and 4.06 % in April. Fresh fruit now costs 15.8 % more than in June 2019. Fresh vegetable prices are on the rise: 9.0 % on an annual basis. This is largely the result of a lower supply of some products due to lower harvests because of poorer weather conditions. Fish and seafood are 2.9 % more expensive than a year ago. Meat is 2.6 % more expensive than in June 2019. This is mainly the result of the price increase of pork due to the increased demand from China on the European market, due to the African swine fever. Prices for non-alcoholic beverages are now on average 1.5 % higher than in June last year. Alcoholic beverages are 2.5 % more expensive than last year. Tobacco prices went up by 1.6 % compared to June 2019.

Energy inflation now stands at -10.61 %. Electricity is now 7.7 % less expensive than a year ago. Natural gas is 17.0 % cheaper on an annual basis. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have declined by 12.2 % over a year. Motor fuels are 10.5 % less expensive than last year. Inflation for services has declined to 1.23 % from 1.42 %. Inflation for rents amounts to 2.68 % in May and has increased to 2.75 % in June.

Some products and services that rose sharply in price compared to June last year are:

Some products and services that dropped sharply in price compared to June last year are:

The main group with the largest upward effect^[i] on inflation in June was "Food and non-alcoholic beverages" with an effect of 0.59 percentage point. The largest downward effect was measured for “Housing, water and energy” with -0.61 percentage point.

The main group with the largest contribution^[ii] to inflation is "Food and non-alcoholic beverages" with 0.59 percentage point. The lowest contribution to inflation was registered by the main group “Housing, water and energy”, with -0.40 percentage point.

The first inflation estimate according to the European harmonised index of consumer prices (HICP flash estimate) for Belgium amounts to 0.2% in June. The difference between the HICP and the national consumer price index (CPI) is mainly due to conceptual differences in terms of weight source, reference population, spending concept, seasonal adjustment and moving average (smoothing).