Inflation increases slightly and stands at 0.73%

Consumer prices
Inflation increases slightly and stands at 0.73%

Consumer price index of July 2020

  • Inflation increases from 0.60% to 0.73% in July.
  • The consumer price index this month increases by 0.24 point or 0.22%.
  • Inflation based on the health index has increased to 1.00% from 0.94%.
  • The smoothed health index now stands at 107.93 points.
  • The most significant price increases in July were registered for motor fuels, airplane tickets, fish and seafood, hotel rooms as well as restaurants and cafés. However, medicines, natural gas, travels abroad and city trips, vegetables and private rent have had a decreasing effect on the index.
  • The current measures due to the COVID-19 have virtually no impact on the calculation of the index. More information is available here.

The consumer price index is running at 109.76 points in July 2020. It has increased by 0.24 point over the month. Inflation has gone up to 0.73% from 0.60%. The health index gained 0.11 point and is now at 110.16 points. Inflation based on the health index has gone up from 0.94% to 1.00%. The most significant price increases were registered for motor fuels, airplane tickets, fish and seafood, hotel rooms as well as restaurants and cafés. However, medicines, natural gas, travels abroad and city trips, vegetables and private rent have had a decreasing effect on the index.

cpi _1graph202007_en

 

The consumer price index has increased by 0.24 point or 0.22% in July 2020 and now stands at 109.76 points, against 109.52 points in June 2020 (2013=100).

The health index has gained 0.11 point to 110.16 points in July, compared to 110.05 points in June. The smoothed health index now stands at 107.93 points. The next central index for public service and social benefits is set at 109.34 points.

Products with the largest upward effect in July were motor fuels, airplane tickets, fish and seafood, hotel rooms as well as restaurants and cafés. However, medicines, natural gas, travels abroad and city trips, vegetables and private rent provided the largest downward pressure compared to last month. The most important trends this month are:

 

Upward: Effect: Downward: Effect:
Motor fuels +0,120 point Medicines -0,090 point
Airplane tickets +0,090 point Natural gas -0,045 point
Fish and seafood +0,055 point Travels abroad and city trips -0,040 point
Hotel rooms +0,055 point Vegetables -0,035 point
Restaurants and cafés +0,050 point Private rent -0,035 point

In July, prices for motor fuels increased by 3.6% on average compared to last month. Prices of airplane tickets increased by 14.0% on average. Fish and seafood are on average 4.4% more expensive compared to the previous month. Prices for hotel rooms have gone up by 7.8% this month. Restaurants and cafés became on average 0.8% more expensive compared to the previous month.

Medicines became on average 5.2% less expensive compared to last month. Natural gas has become on average 3.3% less expensive. Travels abroad and city trips have become on average 2.1% cheaper this month after seasonal ajustment. Vegetables have become 1.5% less expensive this month. Private rent was on average 0.4% less expensive.

Inflation is now running at 0.73%, as against 0.60% in June and 0.48% in May. Inflation based on the health index amounted to 1.00% this month compared to 0.94% in June and 1.11% in May. Inflation without energy has increased to 1.78% in July compared to 1.68% in June and 2.05% in May. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 1.31% in July, compared to 1.41% in June and 1.63% in May.

Food inflation (including alcoholic beverages) stands at 3.48%, compared to 3.24% in the previous month and 4.10% in May. Fresh fruit now costs 16.0% more than in July 2019. Fresh vegetable prices are on the rise: 8.4% on an annual basis. These price increases are largely the result of a lower supply of some products due to lower harvests because of poorer weather conditions. Fish and seafood are 6.7% more expensive than in July 2019, mainly due to price increases for shrimps due to a shortage of peeled shrimps due to measures against Covid-19 in Morocco. Meat is 3.1% more expensive than in July 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 0.5% higher than in July last year. Alcoholic beverages are 1.6% more expensive than last year. Tobacco prices went up by 1.7% compared to July 2019.

Energy inflation is now running at -9.14%, compared to -10.61% in June and -13.76% in May. Electricity is now 6.5% less expensive than a year ago. Natural gas is 15.9% cheaper on an annual basis. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have declined by 13.5% over a year. Motor fuels are 7.7% less expensive than last year. Inflation for services rose to 1.30% from 1.23%. Inflation for rents amounted to 2.75% in June and has decreased to 2.29% in July.

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

Upward: Inflation
Fresh seafood 39.7%
Fresh fruit 16.0%
Postal mail 13.8%
Jewellery 13.3%
Wine from other fruits (cider) 11.0%
Fresh vegetables, excluding potatoes 8.4%
Flowers and plants 8.3%
Accessories for computers (e.g. printers) 8.1%

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

Downward: Inflation
Natural gas -15.9%
Domestic heating oil -13.5%
Airplane tickets -9.4%
Diesel -9.0%
Holiday centres, camping sites and youth hostels -8.0%
Petrol -7.3%
Electricity -6.5%
Mobile telephone services -6.2%

The main group with the largest upward effect[i] on inflation in July was "Food and non-alcoholic beverages" with an effect of 0.64 percentage point. The largest downward effect was measured for “Housing, water and energy” with -0.60 percentage point.

cpi _3graph202007_en

The main group with the largest contribution[ii] to inflation is "Food and non-alcoholic beverages" with 0.65 percentage point. The lowest contribution to inflation was registered by the main group “Housing, water and energy”, with -0.37 percentage point.

cpi _4graph202007_en

cpi _2graph202007_en

 

2013 = 100 April May June July
Consumer price index 109.53 109.45 109.52 109.76
Inflation 0.57% 0.48% 0.60% 0.73%
Health index 110.22 110.10 110.05 110.16
Smoothed health index* 107.74 107.84 107.88 107.93
* defined in the law of 23 April 2015 on the promotion of employment (Belgian Official Journal of 27 April 2015)

The first inflation estimate according to the European harmonised index of consumer prices (HICP flash estimate) for Belgium amounts to 1.7% in July. 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).

 

[i]An effect on inflation shows the changes on the inflation rate by including this product group in the CPI calculation. The effect not only takes the weight of the product group into account, but it also takes into account whether the product group inflation is higher or lower than that of the total expenditure (overall CPI).

[ii]The contribution to inflation of a specific product group shows how much of the change in the total expenditure is due to the price variation of this product group.