- Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) was running at 1.5% in January compared to 0.5% in December and -0.8% in November.
- Core inflation (inflation without energy and unprocessed food) stood at 5.0% in January compared to 5.5% in December.
- The inflation rate based on the consumer price index (CPI) for January rose to 1.8% compared to 1.4% in December.
- The sub-indices with the largest upward effect on inflation were clothing, restaurants and cafés, tobacco, private rent, meat and the maintenance and repair of motor vehicles.
- Most of the downward pressure on inflation this month came from gas and electricity.
- The harmonised index of consumer prices of January for the EU Member States will be published by Eurostat on 22 February.
Belgium's inflation rate based on the European harmonised index of consumer prices (HICP)[1] was running at 1.5% in January compared to 0.5% in December and -0.8% in November. The inflation rate based on the harmonised index of consumer prices at constant tax rates (HICP-CT)[2] was running at -1.1% in January compared to -2.0% in December. The difference in inflation between the HICP and the HICP-CT is largely due to higher excise duties on cigarettes, tobacco, electricity, gas and motor fuels. These tax changes 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, amounts to 5.0% in January, compared to 5.5% in December and 5.6% in November. Inflation without energy fell to 5.1% in January compared to 5.6% in December and 5.7% in November.
Inflation for food products stands at 5.1% this month, compared to 7.1% last month. This inflation started to increase sharply in the spring of 2022 and reached a peak at 20,3% in March 2023. Since then, it has been decreasing gradually. Inflation for oils, fish, dairy products, bread and cereals and meat has sharply increased up to March 2023, but has been decreasing since then. Inflation for oils amounted to 1.5% this month. In March 2023, this figure was still 31.3%. For dairy products, inflation is now 3.3% compared to 31.0% in March 2023. Fish registers this month an inflation rate of 4.1%. In March 2023, this figure was still 17.2%. For bread and cereals, inflation is 4.1% this month compared to 22.0% in March 2023. Meat inflation amounts to 5.6% this month compared to 16.8% in March 2023.
The decrease in inflation can mainly be associated with lower energy prices. The contribution of energy to inflation has been negative since January 2023 and amounts to -2.9%. Food products provide a contribution of 0.8%.
Electricity is now 31.8% less expensive than a year ago. Natural gas is 47.5% cheaper on an annual basis. The price of domestic heating oil has risen by 5.5% compared to last year.
Inflation and impact of the 12 main groups on inflation
Based on the breakdown into 12 main groups, the highest inflation rate in January was measured for “Clothing and footwear” (8.9%). The lowest inflation rate was measured for “Housing, water and energy” (-12.6%). The main group with the largest upward effect on inflation in January was “Food and non-alcoholic beverages” with an effect of 0.7 percentage points. The largest downward effect was measured for “Housing, water and energy” with -3.3 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 | ||||||||
| Nov/23 | Dec/23 | Jan/24 | Jan/24 | Nov/23 | Dec/23 | Jan/24 | |||
| 0 | Total expenditure | 1.000 | -0.8 | 0.5 | 1.5 | -1.1 | |||
| 1 | Food and non-alcoholic beverages | 157.3 | 7.9 | 7.1 | 5.1 | 5.0 | 1.6 | 1.2 | 0.7 |
| 2 | Alcoholic beverages and tobacco | 49.0 | 9.1 | 9.1 | 8.8 | 1.4 | 0.5 | 0.4 | 0.4 |
| 3 | Clothing and footwear | 54.3 | 3.5 | 2.9 | 8.9 | 8.9 | 0.3 | 0.2 | 0.5 |
| 4 | Housing, water and energy | 164.5 | -23.9 | -18.6 | -12.6 | -23.2 | -6.0 | -4.8 | -3.3 |
| 5 | Interior decoration and household appliances | 74.4 | 3.5 | 3.5 | 3.8 | 3.8 | 0.3 | 0.2 | 0.2 |
| 6 | Health | 85.4 | 4.6 | 4.6 | 2.8 | 2.8 | 0.4 | 0.3 | 0.1 |
| 7 | Transport | 108.9 | 1.8 | 4.3 | 3.1 | 1.4 | 0.3 | 0.4 | 0.2 |
| 8 | Communication | 32.2 | 2.0 | 2.9 | 1.1 | 1.1 | 0.1 | 0.1 | 0.0 |
| 9 | Recreation and culture | 87.1 | 4.0 | 3.4 | 3.2 | 3.3 | 0.4 | 0.3 | 0.2 |
| 10 | Education | 5.1 | 7.5 | 7.5 | 7.5 | 7.5 | 0.0 | 0.0 | 0.0 |
| 11 | Hotels, cafés and restaurants | 93.1 | 7.9 | 8.0 | 6.5 | 6.5 | 0.7 | 0.7 | 0.5 |
| 12 | Various goods and services | 88.7 | 5.5 | 5.5 | 3.9 | 3.9 | 0.5 | 0.4 | 0.2 |
Inflation according to specific aggregates
The overall HICP can be broken down into five specific aggregates which together form the total expenditure.
- Inflation for energy products increased compared to the previous month. It was running at -22.3% in January compared to -28.7% in December and -36.5% in November. 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 -29.7%.
- Inflation of processed food fell from 7.6% in December to 5.6% in January. In November it was 8.2%. Compared to the previous month, prices rose by an average of 1.9%. The average inflation rate for the last twelve months is 11.9%.
- Inflation for unprocessed food (fruit, vegetables, meat and fish) amounts to 7.1% in January compared to 7.5% in December and 8.0% in November. Prices increased by 0.9% on average compared to December. The average inflation rate of this aggregate for the last twelve months is 11.8%.
- Inflation for non-energy industrial goods was running at 4.3% in January compared to 3.1% in December and 3.4% in November. Prices decreased by 3.3% on average compared to the previous month, mainly due to the sales. The average inflation rate of this aggregate for the last twelve months is 5.2%.
- Inflation for services (including rents) went down from 6.1% in December to 5.2% in January. Prices increased by 0.1% compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 6.2%.
Core inflation (inflation without energy and unprocessed food) stands at 5.0% in January. This is a decrease compared to the 5.5% registered in December. The average core inflation over the last 12 months amounts to 7.1%. Prices of this subaggregate decreased by 0.5% compared to the previous month.
Inflation according to specific aggregates
| Specific aggregates | Weight (‰) | Inflation on annual basis (%) | 12-month average (%) | Monthly change | ||
|---|---|---|---|---|---|---|
| Nov/23 | Dec/23 | Jan/24 | Jan/24 | Jan/24 | ||
| Total expenditure | 1.000,0 | -0.8 | 0.5 | 1.5 | 1.9 | -0.7 |
| Fuels and energy sources | 100,8 | -36.5 | -28.7 | -22.3 | -29.7 | -3.1 |
| Processed food products | 164,8 | 8.2 | 7.6 | 5.6 | 11.9 | 1.9 |
| Unprocessed food | 41,4 | 8.0 | 7.5 | 7.1 | 11.8 | 0.9 |
| Non-energy industrial goods | 256,0 | 3.4 | 3.1 | 4.3 | 5.2 | -3.3 |
| Services | 436,9 | 5.9 | 6.1 | 5.2 | 6.2 | 0.1 |
| HICP without energy and unprocessed food (core inflation) | 857,7 | 5.6 | 5.5 | 5.0 | 7.1 | -0.5 |
Effect of sub-indices on inflation
The largest upward effect on inflation was caused by clothing with 0.47 percentage points. Restaurants and cafés had an impact of 0.40 percentage points. Tobacco provided an effect of 0.36 percentage points. Housing rent provided an upward effect of 0.33 percentage points. Meat provided an upward effect of 0.18 percentage points. Finally, the maintenance and repair of vehicles had a positive impact of 0.17 percentage points.
Sub-indices with the largest upward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2024 | Jan/24 | ||
| 03.1.2 | Clothing | 43.1 | 0.47 |
| 11.1.1 | Restaurants, cafés and similar services | 78.7 | 0.40 |
| 02.2.0 | Tobacco | 32.4 | 0.36 |
| 04.1.0 | Housing rent | 72.5 | 0.33 |
| 01.1.2 | Meat | 41.1 | 0.18 |
| 07.2.3 | Maintenance and repair of personal transport equipment | 23.2 | 0.17 |
The largest downward effect on inflation came from natural gas with an impact of -1.65 percentage points. Electricity had a negative impact of -1.59 percentage points.
Sub-indices with the largest downward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2024 | Jan/24 | ||
| 04.5.2 | Gas | 20.2 | -1.65 |
| 04.5.1 | Electricity | 34.9 | -1.59 |
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 January. In January, this inflation in Belgium amounted to 1.5%, an increase compared to an inflation rate of 0.5% in December. The Netherlands registered an inflation rate of 3.1% in January. This is an increase compared to the 1.0% registered in December. Inflation in France was running at 3.4% in January, down from 4.1% in December. The first HICP flash estimate for January in Germany was 3.1%, a decrease compared to December, when it stood at 3.8%.
Since the HICP at constant tax rates for January are not yet published by Eurostat, December is the most recent month to use as a basis for comparison. Belgium's inflation rate based on the HICP-CT stood at -2.0% in December, up from a rate of -3.1% in November. In December, this inflation rate in Germany was 3.7%. This is an increase compared to November, when inflation was 2.1%. Inflation in France rose from 3.9% in November to 4.2% in December. In the Netherlands it went down to -0.6% in December. In November, this inflation rate was -0.1%.
[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).