Inflation increases slightly and stands at 0.82 %

Consumer price index of August 2020

• Inflation increases from 0.73 % to 0.82 % in August.
• The consumer price index this month increases by 0.07 point or 0.06 %.
• Inflation based on the health index has increased to 1.04 % from 1.00 %.
• The smoothed health index is running at 107.92 points in August.
• The most significant price increases in August were registered for non-alcoholic beverages, restaurants and cafés, bread and cereals, hotel rooms, alcoholic beverages and the purchase of vehicles. However, fruit, airplane tickets, vegetables, holiday villages and camping sites have had a decreasing effect on the index.

The consumer price index is running at 109.83 points in August 2020. It has increased by 0.07 point over the month. Inflation has gone up to 0.82 % from 0.73 %. The health index gained 0.04 point and is now at 110.20 points. Inflation based on the health index has gone up from 1.00 % to 1.04 %. The most significant price increases were registered for non-alcoholic beverages, restaurants and cafés, bread and cereals, hotel rooms, alcoholic beverages and the purchase of vehicles. However, fruit, airplane tickets, vegetables, holiday villages and camping sites have had a decreasing effect on the index.

The consumer price index has increased by 0.07 point or 0.06 % in August 2020 and now stands at 109.83 points, against 109.76 points in July 2020 (2013=100).

The health index has gained 0.04 point to 110.20 points in August, compared to 110.16 points in July. The smoothed health index is running at 107.92 points in August. The next central index for public service and social benefits is set at 109.34 points.

Products with the largest upward effect in August were non-alcoholic beverages, restaurants and cafés, bread and cereals, hotel rooms, alcoholic beverages and the purchase of vehicles. However, fruit, airplane tickets, vegetables, holiday villages and camping sites provided the largest downward pressure compared to last month. The most important trends this month are:

In August, prices for non-alcoholic beverages increased by 3.5 % on average compared to last month. Prices in restaurants and cafés increased by 0.7 % on average. Bread and cereals are on average 1.0 % more expensive compared to the previous month. Prices for hotel rooms have gone up by 4.5 % this month. Alcoholic beverages became on average 1.5 % more expensive compared to the previous month. The purchase price of vehicles has increased by 0.4 %.

Fruit became on average 4.0 % less expensive compared to last month. Airplane tickets have become on average 7.4 % cheaper. Prices for vegetables have gone down by 2.4 % this month. After seasonal adjustment, stays in holiday villages and camping sites cost on average 6.6 % less.

Inflation is now running at 0.82 %, compared to 0.73 % in July and 0.60 % in June. Inflation based on the health index amounted to 1.04 % this month compared to 1.00 % in July and 0.94 % in June. Inflation without energy has increased to 1.82 % in August, compared to 1.78 % in July and 1.68 % in June. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 1.49 % in August, against 1.31 % in July and 1.41 % in June.

Food inflation (including alcoholic beverages) stands at 3.56 %, compared to 3.48 % in the previous month and 3.24 % in June. Fresh fruit now costs 10.7 % more than in August 2019. Fresh vegetable prices are on the rise: 5.1 % 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 5.5 % more expensive than in August 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 3.3 % more expensive than in August 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 4.1 % higher than in August last year. Alcoholic beverages are 2.4 % more expensive than last year. Tobacco prices went up by 1.8 % compared to August 2019.

Energy inflation is now running at -8.68 %, compared to -9.14 % in July and -10.61 % in June. Electricity is now 6.0 % less expensive than a year ago. Natural gas is 15.8 % cheaper on an annual basis. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have declined by 14.6 % over a year. Motor fuels are 6.5 % less expensive than last year. Inflation for services rose to 1.33 % from 1.30 % last month. Inflation for rents amounts to 2.29 % in July and has slightly increased to 2.34 % in August.

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

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

The main group with the largest upward effect^[i] on inflation in August was "Food and non-alcoholic beverages" with an effect of 0.62 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 0.65 percentage point. The lowest contribution to inflation was registered by the main group “Housing, water and energy”, with -0.35 percentage point.

The first inflation estimate according to the European harmonised index of consumer prices (HICP flash estimate) for Belgium amounts to -0.9% in August. The sharp decrease in inflation is due to the postponement of the summer sales from July to August. The sales are processed in the CPI according to another methodology. This is why the inflation is more stable in Augustus.