- Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) stood at 0.5% in December compared to -0.8% in November and -1.7% in October.
- Core inflation (inflation without energy and unprocessed food) stood at 5.5% in December compared to 5.6% in November.
- The inflation rate based on the consumer price index (CPI) for December has increased to 1.4% compared to 0.8% in November.
- The sub-indices with the largest upward effect on inflation were restaurants and cafés, tobacco, private rents, hospital stays, meat, maintenance and repair of motor vehicles and bread and cereals.
- However, the sub-indices with the largest downward effect on inflation were gas and electricity.
- The harmonised index of consumer prices of December for the EU Member States will be published by Eurostat on 17 January.
Belgium's inflation rate based on the European harmonised index of consumer prices (HICP)[1] stood at 0.5% in December compared to -0.8% in November and -1.7% in October. The inflation rate based on the harmonised index of consumer prices at constant tax rates (HICP-CT)[2] was -2.0% in December, compared to -3.1% in November. The difference in inflation between the HICP and the HICP-CT is largely due to higher excise duty on cigarettes, tobacco, electricity, gas and motor fuels. These modifications to taxation are not taken into account in the HICP-CT.
Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 5.5% in December, compared to 5.6% in November and 6.4% in October. Inflation without energy decreased to 5.6% in December, compared to 5.7% in November and 6.5% in October.
Food inflation now stands at 7.1% compared to 7.9% the previous month. In the spring of 2022, this inflation began to rise sharply, reaching a peak of 20.3% in March 2023. Since March 2023, it has been gradually decreasing. Inflation for oils, fish, dairy products, bread and cereals and meat has sharply increased until March 2023, but has been declining since then. Inflation for oils stands this month at 4.6%. In March 2023, it was still 31.3%. For dairy products, inflation is now 6.8% compared to 31.0% in March 2023. Fish registers this month an inflation rate of 5.7%. In March this year, it was still 17.2%. For bread and cereals, inflation stands at 6.7% this month compared to 22.0% in March. Inflation for meat amounts to 6.7% this month compared to 16.8% in March 2023.
Most of the decrease in inflation can be associated with lower energy prices. The contribution of energy to inflation has been negative since January 2023 and now stands at -4.2%. Food products provide a contribution of 1.1%.
Electricity is now 35.5% less expensive than a year ago. Natural gas is 58.9% less expensive on an annual basis. Domestic heating oil prices have gone up by 4.8% compared to last year.
Inflation and effect on inflation for the 12 main groups
Based on the breakdown into 12 main groups, the highest inflation rate in December was measured for “Alcoholic beverages and tobacco” (9.1%). The lowest inflation rate was measured for “Housing, water and energy” (-18.6%). The main group with the largest upward effect on inflation in December was “Food and non-alcoholic beverages” with an effect of 1.2 percentage points. The largest downward effect was measured for “Housing, water and energy” (-4.8 percentage points).
Inflation[3] and effect[4] on inflation for the overall HICP and 12 main groups
| Product group | Weight (‰) | Inflation on annual basis (%) | Effect on inflation (percentage point) | ||||||
|---|---|---|---|---|---|---|---|---|---|
| HICP | HICP-CT | ||||||||
| Oct/23 | Nov/23 | Dec/23 | Dec/23 | Oct/23 | Nov/23 | Dec/23 | |||
| 0 | Total expenditure | 1.000 | -1.7 | -0.8 | 0.5 | -2.0 | |||
| 1 | Food and non-alcoholic beverages | 155.4 | 9.2 | 7.9 | 7.1 | 7.1 | 2.0 | 1.6 | 1.2 |
| 2 | Alcoholic beverages and tobacco | 47.4 | 8.9 | 9.1 | 9.1 | 1.7 | 0.5 | 0.5 | 0.4 |
| 3 | Clothing and footwear | 60.1 | 6.0 | 3.5 | 2.9 | 2.9 | 0.5 | 0.3 | 0.1 |
| 4 | Housing, water and energy | 201.3 | -29.6 | -23.9 | -18.6 | -28.4 | -7.7 | -6.0 | -4.8 |
| 5 | Interior decoration and household appliances | 72.9 | 4.4 | 3.5 | 3.5 | 3.5 | 0.5 | 0.3 | 0.2 |
| 6 | Health | 70.6 | 4.7 | 4.6 | 4.6 | 4.6 | 0.5 | 0.4 | 0.3 |
| 7 | Transport | 105.9 | 2.9 | 1.8 | 4.3 | 2.6 | 0.6 | 0.3 | 0.4 |
| 8 | Communication | 32.2 | 2.2 | 2.0 | 2.9 | 2.9 | 0.1 | 0.1 | 0.1 |
| 9 | Recreation and culture | 85.8 | 4.3 | 4.0 | 3.4 | 3.4 | 0.5 | 0.4 | 0.3 |
| 10 | Education | 5.4 | 7.5 | 7.5 | 7.5 | 7.5 | 0.1 | 0.0 | 0.0 |
| 11 | Hotels, cafés and restaurants | 82.7 | 9.1 | 7.9 | 8.0 | 8.0 | 0.9 | 0.7 | 0.7 |
| 12 | Various goods and services | 80.4 | 5.7 | 5.5 | 5.5 | 5.5 | 0.6 | 0.5 | 0.4 |
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 increased compared to the previous month. In December, it amounted to -28.7% compared to -36.5% in November and -42.6% in October. Prices increased by 4.1% on average compared to the previous month. The average inflation rate of this aggregate for the last twelve months is -27.7%.
- Inflation for processed food products decreased from 8.2% in November to 7.6% in December. In October, it was 9.3%. Prices increased by 0.1% on average compared to the previous month. The average inflation rate for the last twelve months is 12.8%.
- Inflation for unprocessed food (fruit, vegetables, meat and fish) amounts to 7.5% in December compared to 8.0% in November and 8.5% in October. Prices stayed stable on average compared to November. The average inflation rate of this aggregate for the last twelve months is 12.5%.
- Inflation for non-energy industrial goods went from 4.4% in October and 3.4% in November to 3.1% in December. Prices have increased by 0.9% compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 5.4%.
- Inflation for services (including rents) has increased from 5.9% in November to 6.1% in December. Prices increased by 1.1% compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 6.3%.
Core inflation (inflation without energy and unprocessed food) stood at 5.5% in December. This is a decrease compared to the 5.6% rate registered in November. Average core inflation over the last 12 months amounts to 7.4%. Prices of this subaggregate have increased by 0.8% compared to the previous month.
Inflation according to specific aggregates
| Specific aggregates | Weight (‰) | Inflation on annual basis (%) | 12-month average (%) | Monthly change | ||
|---|---|---|---|---|---|---|
| Oct/23 | Nov/23 | Dec/23 | Dec/23 | Dec/23 | ||
| Total expenditure | 1.000,0 | -1.7 | -0.8 | 0.5 | 2.4 | 1.1 |
| Fuels and energy sources | 146,8 | -42.6 | -36.5 | -28.7 | -27.7 | 4.1 |
| Processed food products | 163,3 | 9.3 | 8.2 | 7.6 | 12.8 | 0.1 |
| Unprocessed food | 39,5 | 8.5 | 8.0 | 7.5 | 12.5 | 0.0 |
| Non-energy industrial goods | 248,9 | 4.4 | 3.4 | 3.1 | 5.4 | 0.9 |
| Services | 401,5 | 6.3 | 5.9 | 6.1 | 6.3 | 1.1 |
| HICP without energy and unprocessed food (core inflation) | 813,7 | 6.4 | 5.6 | 5.5 | 7.4 | 0.8 |
Effect of sub-indices on inflation
The largest upward effect on inflation was caused by restaurants and cafés (0.48 percentage points). Tobacco had an impact of 0.37 points. Private rents had a positive effect of 0.36 percentage points. The impact of hospital stays was 0.26 percentage points. Meat provided an upward effect of 0.25 percentage points. Maintenance and repair of motor vehicles had a positive effect of 0.20 percentage points. Finally, bread and cereals had a positive effect of 0.19 percentage points.
Sub-indices with the largest upward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2023 | Dec/23 | ||
| 11.1.1 | Restaurants and cafés | 71.0 | 0.48 |
| 02.2.0 | Tobacco | 30.5 | 0.37 |
| 04.1.0 | Private rents | 68.3 | 0.36 |
| 06.3.0 | Hospital services | 37.1 | 0.26 |
| 01.1.2 | Meat | 40.5 | 0.25 |
| 07.2.3 | Maintenance and repair of personal motor vehicles | 22.3 | 0.20 |
| 01.1.1 | Bread and cereals | 30.4 | 0.19 |
The largest downward effect on inflation came from natural gas (-2.75 percentage points). Electricity provided a downward effect of -1.86 percentage points.
Sub-indices with the largest downward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2023 | Dec/23 | ||
| 04.5.2 | Gas | 45.9 | -2.75 |
| 04.5.1 | Electricity | 48.9 | -1.86 |
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 December. This inflation in Belgium in December amounted to 0.5%, an increase compared to the rate of -0.8% observed in November. The Netherlands registered an inflation rate of 1.0% in December. This is a decrease compared to the 1.4% rate registered in November. Inflation in France in December amounted to 4.1%, up from 3.9% in November. The first HICP flash estimate for December in Germany was 3.8%, an increase compared to November when it was 2.3%.
Since the HICP at constant tax rates for December are not yet published by Eurostat, November is the most recent month to use as a basis for comparison. Belgium's inflation rate based on the HICP-CT stood at -3.1% in November, up from a rate of -4.1% in October. In November, this inflation in Germany was running at 2.1%, down from the rate of 2.7% registered in October. Inflation in France decreased from 4.6% in October to 3.9% in November. In the Netherlands, this inflation increased to -0.1% in November. In October, it was -2.8%.
[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 have been neutralised in the CPI , 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] The effect on inflation shows the changes on the inflation rate by including the sub-index in the HICP. 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).