- Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) was running at 9.3% in March compared to 9.5% in February.
- Core inflation (inflation without energy and unprocessed food) amounted to 3.4% in March compared to 3.8% in February.
- The inflation rate based on the consumer price index (CPI) for March stood at 8.3% compared to 8.0% in February.
- 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 downward effect on inflation this month were housing rent, clothing, meat, restaurants and cafés, nursing in hospitals, telecommunication, tobacco and pharmaceutical products.
- The harmonised index of consumer prices of March for the EU Member States will be published by Eurostat on 21 April.
Inflation based on the European harmonised index of consumer prices (HICP)[1] was running at 9.3% in March compared to 9.5% in February. The inflation rate based on the harmonised index of consumer prices at constant tax rates (HICP-CT)[2] was running at 9.9% in March, compared to 9.6% in February. The difference in inflation between the HICP and the HICP-CT is largely due to the temporary VAT reduction for electricity. These price changes are not taken into account in the HICP-CT.
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Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stood at 3.4% in March, compared to 3.8% in February and 2.6% in January. Inflation without energy went down to 3.5% in March, compared to 3.7% in February and 2.6% in January.
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The sharp increase in inflation in recent months is due to energy products. Energy has a contribution to inflation[3] of 6.1%.
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Electricity is now 49.9% more expensive than a year ago. Natural gas is 148.8% more expensive on an annual basis. The price of domestic heating oil has risen by 89.3% compared to last year.
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Inflation and effect on inflation for the 12 main groups
Based on the breakdown into 12 main groups, the highest inflation rate in March was measured for "housing, water, energy" (33.0%). The lowest inflation rate is recorded for the group ‘Education’ (1.0%).
The main group with the largest upward effect on inflation in March was "housing, water, energy" with an effect on inflation of 4.7 percentage points. The largest downward effect was measured for ‘Food and non-alcoholic beverages’ with -1.0 percentage points.
Inflation[4] and effect[5] 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 | ||||||||
| Jan/22 | Feb/22 | Mar/22 | Mar/22 | Jan/22 | Feb/22 | Mar/22 | |||
| 0 | Total expenditure | 1.000 | 8.5 | 9.5 | 9.3 | 9.9 | |||
| 1 | Food and non-alcoholic beverages | 168.6 | 2.5 | 4.1 | 4.7 | 4.7 | -1.3 | -1.2 | -1.0 |
| 2 | Alcoholic beverages and tobacco | 53.5 | 7.7 | 4.6 | 4.2 | 4.3 | 0.0 | -0.3 | -0.3 |
| 3 | Clothing and footwear | 58.8 | 0.0 | 12.2 | 1.2 | 1.2 | -0.6 | 0.1 | -0.5 |
| 4 | Housing, water and energy | 171.8 | 34.5 | 34.3 | 33.0 | 37.1 | 5.1 | 4.9 | 4.7 |
| 5 | Interior decoration and household appliances | 83.6 | 2.0 | 3.1 | 3.0 | 3.0 | -0.6 | -0.6 | -0.6 |
| 6 | Health | 77.0 | 1.4 | 1.2 | 1.4 | 1.4 | -0.6 | -0.7 | -0.7 |
| 7 | Transport | 107.4 | 9.4 | 10.1 | 12.8 | 12.8 | 0.1 | 0.1 | 0.4 |
| 8 | Communication | 40.0 | 0.1 | 0.1 | 1.5 | 1.5 | -0.3 | -0.3 | -0.3 |
| 9 | Recreation and culture | 82.9 | 2.7 | 3.0 | 3.1 | 3.1 | -0.5 | -0.6 | -0.6 |
| 10 | Education | 5.2 | 1.0 | 1.0 | 1.0 | 1.0 | 0.0 | 0.0 | 0.0 |
| 11 | Hotels, cafés and restaurants | 67.3 | 3.7 | 4.4 | 4.7 | 4.8 | -0.3 | -0.4 | -0.3 |
| 12 | Various goods and services | 84.0 | 2.9 | 3.0 | 3.3 | 3.3 | -0.5 | -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 64.8% in March compared to 65.8% in February and 67.0% in January. Prices increased on average by 2.5% compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 39.1%.
- Inflation of processed food rose slightly from 4.5% in February to 4.6% in March.
- Inflation for unprocessed food (fruit, vegetables, meat and fish) amounts to 4.6% in March compared to 3.2% in February and 1.8% in January. Prices increased on average by 4.2% compared to February. The average inflation rate of this aggregate for the last twelve months is -1.0%.
- The inflation rate for non-energy industrial goods was 3.0% in March, a decrease compared to February when the inflation rate for this aggregate was 4.8%. Prices increased on average by 0.1% compared to the previous month.
- For services (including rent), inflation rises to 3.2% this month, up from 2.8% in February and January. The average inflation rate of this aggregate for the last twelve months is 2.0%.
Core inflation (inflation without energy and unprocessed food) was running at 3.4% in March, a decrease compared to 3.8% in February. Average core inflation over the last 12 months amounts to 2.0%. Prices of this subaggregate increased by 0.2% compared to the previous month.
Inflation according to specific aggregates
| Specific aggregates | Weight (‰) | Inflation on annual basis (%) | 12-month average (%) | Monthly change | ||
|---|---|---|---|---|---|---|
| Jan/22 | Feb/22 | Mar/22 | Mar/22 | Mar/22 | ||
| Total expenditure | 1000.0 | 8.5 | 9.5 | 9.3 | 5.3 | 0.7 |
| Fuels and energy sources | 107.5 | 67.0 | 65.8 | 64.8 | 39.1 | 2.5 |
| Processed food products | 178.0 | 4.2 | 4.5 | 4.6 | 2.5 | 0.5 |
| Unprocessed food | 44.0 | 1.8 | 3.2 | 4.6 | -1.0 | 4.2 |
| Non-energy industrial goods | 271.6 | 1.3 | 4.8 | 3.0 | 1.5 | 0.1 |
| Services | 398.9 | 2.8 | 2.8 | 3.2 | 2.0 | 0.1 |
| HICP without energy and unprocessed food (core inflation) | 848.5 | 2.6 | 3.8 | 3.4 | 2.0 | 0.2 |
Effect of sub-indices on inflation
The largest upward effect on inflation was caused by gas (2.25 percentage points). Electricity provided an upward effect of 1.51 percentage points. Domestic heating oil provided an effect of 0.90 percentage point. Motor fuels provided a positive impact of 0.72 percentage points.
Sub-indices with the largest upward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2022 | Mar/22 | ||
| 04.5.2 | Gas | 24.0 | 2.25 |
| 04.5.1 | Electricity | 38.8 | 1.51 |
| 04.5.3 | Domestic heating oil | 11.7 | 0.90 |
| 07.2.2 | Motor fuels | 32.1 | 0.72 |
The largest downward effect on inflation came from housing rent with an impact of -0.56 percentage points. Clothing had a negative impact of -0.38 percentage points. The impact of meat on inflation was -0.30 percentage points. Restaurants and cafés had a negative impact of -0.27 percentage points. Nursing in hospitals and telecommunication both had a negative impact of -0.26 percentage points. Tobacco provided an effect of -0.18 percentage points. Pharmaceutical products had a negative impact of -0.15 percentage points.
Sub-indices with the largest downward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2022 | Mar/22 | ||
| 04.1.0 | Housing rent | 73.6 | -0.56 |
| 03.1.2 | Clothing | 46.6 | -0.38 |
| 01.1.2 | Meat | 43.8 | -0.30 |
| 11.1.1 | Restaurants and cafés | 58.2 | -0.27 |
| 06.3.0 | Nursing in hospital | 38.4 | -0.26 |
| 08.3.0 | Telecommunication | 36.9 | -0.26 |
| 02.2.0 | Tobacco | 32.5 | -0.18 |
| 06.1.1 | Pharmaceutical products | 12.3 | -0.15 |
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 March. This inflation amounted to 9.3% in March in Belgium, down from the 9.5% registered in February. The Netherlands registered an inflation rate of 11.9% in March. This is an increase compared to 7.3% in February. In France, inflation was 5.1% in March, up from 4.2% in February. In March, the inflation rate in Germany amounted to 7.6%, an increase compared to an inflation rate of 5.5% in February.
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Since the HICP at constant tax rates for March are not yet published by Eurostat, February is the most recent month to use as a basis for comparison. Belgium's inflation rate based on the HICP-CT stood at 9.6% in February, up from a rate of 8.2% in January. In February, this inflation in Germany amounted to 5.4%, an increase compared to an inflation rate of 5.0% in January. In France, inflation was 4.6% in February. This is an increase compared to January, when the inflation rate based on the HICP-CT was 3.3%. In the Netherlands, inflation fell to 8.4% in February, while in January it was 8.8%.
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[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] 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.
[4] 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.
[5] 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).