- Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) was running at 10.4% in July compared to 10.5% in June and 9.9% in May.
- Core inflation (inflation without energy and unprocessed food) amounts to 5.2% in July compared to 4.7% in June.
- The inflation rate based on the consumer price index (CPI) for July stood at 9.6% compared to 9.7% in June.
- The sub-indices with the largest upward effect on inflation were gas, electricity, domestic heating oil and motor fuels.
- The sub-indices with the largest negative effect on inflation this month were clothing, housing rent, telecommunication, restaurants and cafés, nursing in hospital, car insurances, pharmaceutical products, tobacco and furniture.
- The harmonised index of consumer prices of July for the EU Member States will be published by Eurostat on 18 August.
The inflation rate based on the European harmonised index of consumer prices (HICP) was running at 10.4% in July compared to 10.5% in June and 9.9% in May. The inflation rate based on the harmonised index of consumer prices at constant tax rates (HICP-CT) was running at 11.3% in July, compared to 11.4% in June. The difference in inflation between the HICP and the HICP-CT is largely due to the temporary VAT reduction for electricity and gas. These price 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, stands at 5.2% in July, compared to 4.7% in June and 4.1% in May. Inflation without energy has increased to 5.4% in July compared to 4.8% in June and 4.1% in May.
Inflation for food products stands at 9.9% this month, compared to 8.7% last month. This inflation for food has sharply increased in recent months. In November, it was still 0.3%. Inflation for oils, fish, dairy products, bread and cereals and meat has sharply increased in recent months. Inflation for oils stands this month at 21.2%. In November, it was still 4.2%. For dairy products, inflation is now 13.8% compared to 0.8% in November. Fish has an inflation rate of 10.8% this month, while in November it was -1.2%. For bread and cereals, it stands this month at 11.7% compared to 1.7% in November. Inflation for meat amounts this month to 9.6% compared to 0.7% in November.
The sharp increase in inflation in recent months is largely due to energy products. Energy has a contribution to inflation of 5.5%. Food products provide a contribution of 1.7%.
Electricity is now 44.7% more expensive than a year ago. Natural gas is 97.0% more expensive on an annual basis. The price of domestic heating oil has risen by 93.3% 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 July is measured for ‘Housing, water, energy’ (29.4%). The lowest inflation rate is recorded for the group ‘Education’ (1.0%).
The main group with the largest upward effect on inflation in July is ‘Housing, water, energy’ with an effect on inflation of 3.9 percentage points. The largest downward effect is measured for ‘Health’ with -0.7 percentage points.
|Product group||Weight (‰)||Inflation on annual basis (%)||Effect on inflation (percentage point)|
|1||Food and non-alcoholic beverages||168.6||7.0||8.7||9.9||9.9||-0.6||-0.4||-0.1|
|2||Alcoholic beverages and tobacco||53.5||4.2||6.0||6.4||4.0||-0.3||-0.3||-0.2|
|3||Clothing and footwear||58.8||-0.6||-1.4||2.2||2.2||-0.6||-0.7||-0.6|
|4||Housing, water and energy||171.8||33.5||32.4||29.4||36.3||4.7||4.4||3.9|
|5||Interior decoration and household appliances||83.6||4.0||4.7||5.3||5.3||-0.5||-0.5||-0.5|
|9||Recreation and culture||82.9||3.5||4.1||3.6||3.6||-0.6||-0.6||-0.6|
|11||Hotels, cafés and restaurants||67.3||6.3||5.4||5.6||-0.4||-0.3||-0.4||-0.3|
|12||Various goods and services||84.0||3.6||3.8||4.2||4.2||-0.6||-0.6||-0.6|
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 decreased compared to the previous month. It was running at 55.1% in July compared to 64.6% in June and 65.5% in May. Prices decreased on average by 1.5% compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 53.4%.
- Inflation of processed food rose from 8.3% in June to 9.3% in July. In May it was running at 6.6%. Prices increased on average by 1.6% compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 4.5%.
- Inflation for unprocessed food (fruit, vegetables, meat and fish) amounts to 8.0% in July compared to 7.1% in June and 5.5% in May. Prices decreased on average by 0.3% compared to June. The average inflation rate of this aggregate for the last twelve months is 2.1%.
- The inflation rate for non-energy industrial goods was 4.0% in July, an increase compared to June when the inflation rate for this aggregate was 3.6%. Prices decreased by 4.4% on average compared to the previous month, due to the summer sales.
- For services (including rent), inflation rises to 4.2% this month, compared to 3.8% in June and 3.5% in May. The average inflation rate of this aggregate for the last twelve months is 2.8%.
Core inflation (inflation without energy and unprocessed food) is running at 5.2% in July, an increase compared to 4.7% in June. The average core inflation over the last 12 months amounts to 3.2%. Prices of this sub-aggregate decreased by 0.5% compared to the previous month, mainly due to the summer sales period.
Inflation according to specific aggregates
|Specific aggregates||Weight (‰)||Inflation on annual basis (%)||12-month average (%)||Monthly change|
|Fuels and energy sources||107.5||65.5||64.6||55.1||53.4||-1.5|
|Processed food products||178.0||6.6||8.3||9.3||4.5||1.6|
|Non-energy industrial goods||271.6||3.3||3.6||4.0||3.0||-4.4|
|HICP without energy and unprocessed food (core inflation)||848.5||4.1||4.7||5.2||3.2||-0.5|
Effect of sub-indices on inflation
The largest upward effect on inflation was caused by gas (1.65 percentage points). Electricity provided an upward effect of 1.33 percentage points. Domestic heating oil provided an effect of 0.97 percentage points. Motor fuels provided a positive impact of 0.64 percentage points.
Sub-indices with the largest upward effect on inflation
|Sub-index||Weight (‰)||Effect on inflation (percentage point)|
|04.5.3||Domestic heating oil||11.7||0.97|
The largest downward effect on inflation came from clothing (-0.56 percentage points). Housing rent has a negative impact of -0.55 percentage points. Furthermore, telecommunication and restaurants and cafés had an impact of -0.32 and -0.31 percentage points, respectively. Nursing in hospital had a negative impact of -0.28 percentage points. Car insurances have a negative impact of -0.17 percentage points. Pharmaceutical products had a negative impact of -0.15 percentage points. Finally, tobacco and furniture both provided a negative effect of -0.14 percentage points.
Sub-indices with the largest downward effect on inflation
|Sub-index||Weight (‰)||Effect on inflation (percentage point)|
|11.1.1||Restaurants and cafés||58.2||-0.31|
|06.3.0||Nursing in hospital||38.4||-0.28|
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 July. This inflation amounted to 10.4% in July in Belgium. The Netherlands registered an inflation rate of 11.6% in July. This is an increase compared to 9.9% in June. In France, inflation was 6.8% in July, up from 6.5% in June. In Germany, inflation amounted to 8.5% in July, which represents an increase compared to an inflation rate of 8.2% in June.
Since the HICP at constant tax rates for July are not yet published by Eurostat, June is the most recent month to use as a basis for comparison. Belgium's inflation rate based on the HICP-CT stood at 11.4% in June, up from a rate of 11.0% in May. In Germany, this inflation amounted to 9.1%, which represents an increase compared to an inflation rate of 8.6% in May. In France, inflation was 7.0% in June. This is an increase compared to May, when the inflation rate based on the HICP-CT was 6.2%. In the Netherlands, this inflation rate slightly decreased to 11.6% in June, compared to 11.8% in May.
 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.
 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.
 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.
 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.
 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).