- Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) stood at 4.9% in March compared to 5.4% in February and 7.4% in January.
- Core inflation (inflation without energy and unprocessed food) stood at 8.6% in March compared to 8.5% in February.
- The inflation rate based on the consumer price index (CPI) for March stood at 6.7% compared to 6.6% in February.
- Sub-indices with the largest upward effect on inflation were bread and cereals, meat, dairy products, vegetables, restaurants and cafés, non-durable household goods (e.g. cleaning products), tobacco and sweets.
- On the other hand, gas, domestic heating oil, motor fuels, electricity and telecommunications were the sub-indices with the largest downward effect on inflation this month.
- The harmonised index of consumer prices of March for the EU Member States will be published by Eurostat on 19 April.
Belgium's inflation rate based on the European harmonised index of consumer prices (HICP)[1] stood at 4.9% in March compared to 5.4% in February and 7.4% in January. Inflation based on the harmonised index of consumer prices at constant tax rates (HICP-CT)[2] was running at 5.6% in March, compared to 6.8% in February. 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, stood at 8.6% in March, compared to 8.5% in February and 8.2% in January. Inflation without energy increased to 9.0% in March, up from 8.8% in February and 8.6% in January.
Food inflation now stands at 20.3% compared to 19.4% last month. This inflation has sharply increased in recent months. In March 2022, it was still 4.7%. Inflation for oils, fish, dairy products, bread and cereals and meat has sharply increased in recent months. Inflation for oils stands this month at 31.3%. In March last year, it was still 13.0%. For dairy products, inflation is now 31.0% compared to 5.9% in March 2022. Fish registers this month an inflation rate of 17.2%. In March last year, it was 5.5%. For bread and cereals, inflation stands at 22.0% this month compared to 5.3% in March 2022. Meat inflation amounts to 16.8% this month compared to 3.1% in March last year.
The decrease in inflation can be associated with lower energy prices. The contribution of energy to inflation is now negative, at -2.9%. Food products provide a contribution of 3.2%.
Electricity is now 2.3% less expensive than a year ago. Natural gas is 45.6% less expensive on an annual basis. Domestic heating oil prices have gone down by 32.3% 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 March was measured for “Food and non-alcoholic beverages” (20.3%). The lowest inflation rate was measured for “Housing, water and energy” (-9.7%). The main group with the largest upward effect on inflation in March was “Food and non-alcoholic beverages” with an effect of 2.8 percentage points. The largest downward effect was measured for “Housing, water and energy” (-3.6 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 | ||||||||
| Jan/23 | Feb/23 | Mar/23 | Mar/23 | Jan/23 | Feb/23 | Mar/23 | |||
| 0 | Total expenditure | 1.000 | 7.4 | 5.4 | 4.9 | 5.6 | |||
| 1 | Food and non-alcoholic beverages | 155.4 | 18.8 | 19.4 | 20.3 | 20.3 | 2.1 | 2.6 | 2.8 |
| 2 | Alcoholic beverages and tobacco | 47.4 | 8.4 | 8.9 | 8.9 | 6.6 | 0.0 | 0.2 | 0.2 |
| 3 | Clothing and footwear | 60.1 | 8.2 | 5.3 | 6.3 | 6.3 | 0.0 | 0.0 | 0.1 |
| 4 | Housing, water and energy | 201.3 | 2.3 | -8.1 | -9.7 | -6.6 | -1.3 | -3.3 | -3.6 |
| 5 | Interior decoration and household appliances | 72.9 | 7.2 | 7.5 | 7.4 | 7.4 | 0.0 | 0.2 | 0.2 |
| 6 | Health | 70.6 | 4.8 | 4.9 | 4.8 | 4.8 | -0.2 | -0.1 | 0.0 |
| 7 | Transport | 105.9 | 6.4 | 5.9 | 2.5 | 3.1 | -0.1 | 0.1 | -0.3 |
| 8 | Communication | 32.2 | 2.0 | 2.4 | 1.9 | 1.9 | -0.2 | -0.1 | -0.1 |
| 9 | Recreation and culture | 85.8 | 5.1 | 5.2 | 5.4 | 5.4 | -0.2 | 0.0 | 0.1 |
| 10 | Education | 5.4 | 1.6 | 1.6 | 1.6 | 1.6 | 0.0 | 0.0 | 0.0 |
| 11 | Hotels, cafés and restaurants | 82.7 | 8.1 | 8.3 | 8.6 | 8.6 | 0.1 | 0.3 | 0.3 |
| 12 | Various goods and services | 80.4 | 6.7 | 7.0 | 7.1 | 7.1 | -0.1 | 0.1 | 0.2 |
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 decreased compared to the previous month. In March, it amounted to -19.2% compared to -14.7% in February and 0.9% in January Prices declined by 2.9% on average compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 39.8%.
- Inflation for processed food products increased from 16.9% in February to 17.6% in March. In January, it was 16.3%. Prices increased by 1.1% on average compared to the previous month. The average inflation rate for the last twelve months is 11.5%.
- Inflation for unprocessed food (fruit, vegetables, meat and fish) amounts to 17.5% in March compared to 16.6% in February and 16.1% in January. Prices increased on average by 5.0% compared to February. The average inflation rate of this aggregate for the last twelve months is 11.0%.
- Inflation of non-energy industrial goods amounted to 7.0% in March, a slight increase compared to February. On average, prices have increased by 0.4% compared to the previous month.
- For services (including rent), inflation has remained stable at 5.9% from February to this month. The average inflation rate of this aggregate for the last twelve months is 4.5%.
Core inflation (inflation without energy and unprocessed food) stood at 8.6% in March. This is a slight increase compared to the 8.5% rate registered in February. Average core inflation over the last 12 months amounts to 6.2%. Prices of this subaggregate have increased by 0.4% compared to the previous month.
Inflation according to specific aggregates
| Specific aggregates | Weight (‰) | Inflation on annual basis (%) | 12-month average (%) | Monthly change | ||
|---|---|---|---|---|---|---|
| Jan/23 | Feb/23 | Mar/23 | Mar/23 | Mar/23 | ||
| Total expenditure | 1.000,0 | 7.4 | 5.4 | 4.9 | 9.5 | 0.2 |
| Fuels and energy sources | 146,8 | 0.9 | -14.7 | -19.2 | 39.8 | -2.9 |
| Processed food products | 163,3 | 16.3 | 16.9 | 17.6 | 11.5 | 1.1 |
| Unprocessed food | 39,5 | 16.1 | 16.6 | 17.5 | 11.0 | 5.0 |
| Non-energy industrial goods | 248,9 | 6.7 | 6.7 | 7.0 | 5.2 | 0.4 |
| Services | 401,5 | 5.5 | 5.9 | 5.9 | 4.5 | 0.1 |
| HICP without energy and unprocessed food (core inflation) | 813,7 | 8.2 | 8.5 | 8.6 | 6.2 | 0.4 |
Effect of sub-indices on inflation
The largest upward effect on inflation was caused by bread and cereals (0.52 percentage points). Meat provided an upward effect of 0.50 percentage points. Dairy products had a positive effect of 0.49 percentage points. Vegetables had an effect of 0.31 percentage points. Restaurants and cafés had a positive effect of 0.26 percentage points. Non-durable household goods (e.g. cleaning products) had a positive effect of 0.17 percentage points. Tobacco and sweets had both an effect of 0.14 percentage points.
Sub-indices with the largest upward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2023 | Mar/23 | ||
| 01.1.1 | Bread and cereals | 30.4 | 0.52 |
| 01.1.4 | Dairy products | 40.5 | 0.50 |
| 01.1.2 | Meat | 19.2 | 0.49 |
| 01.1.7 | Vegetables | 14.5 | 0.31 |
| 11.1.1 | Cafés and restaurants | 71.0 | 0.26 |
| 05.6.1 | Non-durable household goods | 11.3 | 0.17 |
| 02.2.0 | Tobacco | 30.5 | 0.14 |
| 01.1.8 | Sweets | 11.0 | 0.14 |
The largest downward effect on inflation came from natural gas (-2.10 percentage points). Domestic heating oil provided a negative effect of -0.73 percentage points. Motor fuels had a negative effect of -0.53 percentage points. Electricity provided a downward effect of -0.34 percentage points. Finally, telecommunications provided a contribution of -0.14 percentage points.
Sub-indices with the largest downward effect on inflation
| Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
|---|---|---|---|
| 2023 | Mar/23 | ||
| 04.5.2 | Gas | 45.9 | -2.10 |
| 04.5.3 | Domestic heating oil | 17.3 | -0.73 |
| 07.2.2 | Motor fuels | 33.9 | -0.53 |
| 04.5.1 | Electricity | 48.9 | -0.34 |
| 08.3.0 | Telecommunications | 29.4 | -0.14 |
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 4.9% in March in Belgium. The Netherlands registered an inflation rate of 4.5% in March. This is a decrease compared to the 8.9% rate registered in February. This inflation in France in March amounted to 6.6%, slightly down from 7.3% in February. The first HICP flash estimate for March in Germany was 7.8%, a decrease compared to February when it was 9.3%.
Since the HICP at constant tax rates for March are not yet published by Eurostat, February is most recent month to use as a basis for comparison. Belgium's inflation rate based on the HICP-CT stood at 6.8% in February, down from a rate of 8.8% in January. In February, this inflation in Germany was running at 9.6%, slightly up from the rate of 9.5% registered in January. In February inflation in France slightly decreased to 7.3%, compared to 7.5% in January. In the Netherlands, inflation increased to 9.1% in February. In January, this inflation was 8.5%.
[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).