- Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) was running at 1.8 % in January compared to 2.2 % in December. Core inflation (inflation without energy and unprocessed food) stood at 1.6 % in January, and has remained unchanged since July 2018.
- The inflation rate based on the consumer price index (CPI) for January stood at 2.0 % compared to 2.3 % in December. The difference in inflation between the HICP and the CPI is largely due to the larger weight of fuels and energy sources in the HICP and to the fact that no moving average is used for domestic heating oil in the HICP.
- The sub-indices with the largest upward effect on inflation were electricity, tobacco, gas and package holidays.
- Most of the downward pressure on inflation in January came from accommodation and telecommunication.
- The harmonised index of consumer prices of January for the EU Member States will be published by Eurostat on 22 February.
/hicp2019-01a_en.png)
Inflation of the European harmonised index of consumer prices (HICP)[i] in January compared to 2.2 % in December. Inflation based on the harmonised index of consumer prices at constant tax rates (HICP-CT)[ii] was running at 1.5 % in January, down from 2.0 % in December. The difference in inflation between the HICP and the HICP-CT is largely due to the changes in excise duties on motor fuels and tobacco. These increases are not taken into account in the HICP-CT.
Inflation and effect on inflation for the 12 main groups
Based on the breakdown into 12 main groups, the highest inflation rate in January was measured for “alcoholic beverages and tobacco” (4.6 %). The lowest inflation rate was measured for “clothing and footwear” and “communication” (both 0.4 %).
The main group with the largest upward effect on inflation in January was "housing, water, energy" with an effect on inflation of 0.3 percentage point. “Food and non-alcoholic beverages”, “clothing and footwear”, “interior decoration and household appliances”, “health” and “hotels, cafés and restaurants” had the largest downward effect on inflation, with -0.1 percentage point each.
Inflation[iii]and effect[iv] 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 | ||||||||
| Nov/18 | Dec/18 | Jan/19 | Jan/19 | Nov/18 | Dec/18 | Jan/19 | |||
| 0 | Total expenditure | 1000.0 | 2.9 | 2.2 | 1.8 | 1.5 | |||
| 1 | Food and non-alcoholic beverages | 165.0 | 1.8 | 1.4 | 1.0 | 1.0 | -0.2 | -0.2 | -0.1 |
| 2 | Alcoholic beverages and tobacco | 49.7 | 4.8 | 4.9 | 4.6 | 1.1 | 0.1 | 0.1 | 0.1 |
| 3 | Clothing and footwear | 53.2 | 0.5 | 0.6 | 0.4 | 0.4 | -0.1 | -0.1 | -0.1 |
| 4 | Housing, water and energy | 162.8 | 6.6 | 4.1 | 3.1 | 3.0 | 0.7 | 0.4 | 0.3 |
| 5 | Interior decoration and household appliances | 74.1 | 0.9 | 0.8 | 0.8 | 0.8 | -0.2 | -0.1 | -0.1 |
| 6 | Health | 81.5 | 1.5 | 1.4 | 1.0 | 1.0 | -0.1 | -0.1 | -0.1 |
| 7 | Transport | 123.6 | 4.7 | 3.4 | 1.7 | 1.0 | 0.3 | 0.2 | 0.0 |
| 8 | Communication | 32.9 | 1.1 | 0.2 | 0.4 | 0.4 | -0.1 | -0.1 | 0.0 |
| 9 | Recreation and culture | 87.8 | 1.2 | 1.5 | 2.3 | 2.3 | -0.2 | -0.1 | 0.1 |
| 10 | Education | 5.0 | 1.3 | 1.3 | 1.3 | 1.3 | 0.0 | 0.0 | 0.0 |
| 11 | Hotels, cafés and restaurants | 80.7 | 2.4 | 2.3 | 1.0 | 1.0 | 0.0 | 0.0 | -0.1 |
| 12 | Various goods and services | 83.7 | 1.5 | 1.4 | 2.1 | 2.1 | -0.1 | -0.1 | 0.0 |
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. It was running at 4.3 % in January compared to 8.0 % in December. Prices decreased on average by 3.1 % compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 9.1 %.
- Inflation for processed food products stood at 1.6 % in January, compared to 2.8 % in December and 2.9 % in November. Prices decreased on average by 0.3 % compared to December.
- Inflation for unprocessed food (fruit, vegetables, meat and fish) amounts to 0.5 % in January compared to 1.0 % in December and 1.8 % in November. Prices decreased on average by 0.2 % compared to December. The average inflation rate of this aggregate for the last twelve months is 1.4 %.
- Inflation for non-energy industrial goods was running at 0.8 % in January, compared to 0.9 % in December and 1.0 % in November. Prices decreased on average by 4.6 % compared to December mainly due to the sales period.
- Inflation for services was running at 1.7 % in January, also unchanged from December. Prices decreased on average by 0.4 % compared to December.
Core inflation (inflation without energy and unprocessed food) stood at 1.6 % in January, and has remained unchanged since July 2018. Average core inflation over the last 12 months has also been 1.6 %. Prices of this subaggregate decreased on average by 1.5 % compared to the previous month.
| Specific aggregates | Weight (‰) | Inflation on annual basis (%) | 12-month average (%) | Monthly change | ||
|---|---|---|---|---|---|---|
| Nov/18 | Dec/18 | Jan/19 | Jan/19 | Jan/19 | ||
| Total expenditure | 1000.0 | 2.9 | 2.2 | 1.8 | 2.3 | -1.6 |
| Fuels and energy sources | 97.4 | 13.9 | 8.0 | 4.3 | 9.1 | -3.1 |
| Processed food products | 171.5 | 2.9 | 2.8 | 1.6 | 3.2 | -0.3 |
| Unprocessed food | 43.2 | 1.8 | 1.0 | 0.5 | 1.4 | -0.2 |
| Non-energy industrial goods | 267.2 | 1.0 | 0.9 | 0.8 | 0.8 | -4.6 |
| Services | 420.8 | 1.7 | 1.7 | 1.7 | 1.6 | -0.4 |
| HICP without energy and unprocessed food (core inflation) | 859.4 | 1.6 | 1.6 | 1.6 | 1.6 | -1.5 |
Effect of sub-indices on inflation
The largest upward effect on inflation was caused by electricity (0.23 percentage point). Tobacco provided an effect of 0.16 percentage point. The impact of gas on inflation was 0.10 percentage point. Finally, package holidays provided an effect of 0.09 percentage point.
Sub-indices with the largest upward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2019 | Jan/19 | ||
| 04.5.1 | Electricity | 31.9 | 0.23 |
| 02.2.0 | Tobacco | 30.5 | 0.16 |
| 04.5.2 | Gas | 17.2 | 0.10 |
| 09.6.0 | Package holidays | 13.9 | 0.09 |
The downward effect on inflation was largest for accommodation, with an effect of -0.08 percentage point. Telecommunication provided an effect of -0.06 percentage point.
Sub-indices with the largest downward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2019 | Jan/19 | ||
| 11.2.0 | Accommodation | 9.1 | -0.08 |
| 08.3.0 | Telecommunication | 30.8 | -0.06 |
Comparison with neighbouring countries
Since the HICP of the neighbouring countries will not be published until later, comparisons can only be made for the month of December.
In December, inflation in Belgium was running at 2.2 %, down from the 2.9 % registered in November. The Netherlands registered an inflation rate of 1.9 % in December; a slight increase compared to an inflation rate of 1.8 % in November. Inflation in France was running at 1.9 % in December, down from 2.2 % in November. Inflation in Germany was running at 1.7 % in December, down from 2.2 % in November.
/hicp2019-01b_en.png)
Belgium's inflation rate based on the HICP-CT stood at 2.0 % in December, down from a rate of 2.7 % in November. In Germany, this inflation amounted to 1.7 %, just like the regular HICP inflation. In France, this inflation rate decreased to 1,3 % in December compared to 1,5 % in November. In the Netherlands, this inflation rate amounted to 1.4 % in December, slightly up from 1.3 % in November.
/hicp2019-01c_en.png)
[i] 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.
[ii] 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.
[iii] 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.
[iv] An 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).