Inflation amounts to 8.05%

Consumer prices
Consumer price index for January 2023

Consumer price index for January 2023

  • Inflation decreased from 10.35% to 8.05% in January.
  • The consumer price index increased by 0.12 points or 0.09% this month.
  • Inflation based on the health index has fallen from 10.63% to 8.28%.
  • The smoothed health index amounted to 125.26 points in January.
  • Inflation for food products has sharply increased in recent months. Food inflation (including alcoholic beverages) now stands at 15.59%. The contribution of food products to inflation currently amounts to 2.95 percentage points.
  • Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 8.05% in January, compared to 7.34% in December. This is due to the increase in inflation for processed food products and services.
  • The most significant price increases in January were registered for bread and cereals, dairy products, health insurances, meat, non-alcoholic beverages, fire insurances, nursing care, personal care, bundled telecommunication services and fruit. However, natural gas and electricity have had a decreasing effect on the index.

Inflation amounts to 8.05% in January compared to 10.35% in December and 10.63% in November. Inflation based on the health index amounted to 8.28% this month compared to 10.63% in December and November. Inflation without energy increased to 8.61%, compared to 7.89% in December and 7.80% in November. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 8.05% in January, compared to 7.34% in December and 7.16% in November.

Comment on inflation

With regard to energy, we see a new decrease in inflation this month. It now stands at 5.21%, compared to 32.88% last month. This is due to the sharp increase in energy inflation observed in January 2022 (inflation being a measure related to the previous year) and a decrease in electricity and natural gas prices compared to last month. For electricity, inflation currently stands at 2.8% compared to 35.5% last month. For natural gas, it went from 73.1% last month to -7.1% this month. Compared to last month, natural gas prices decreased by 27.7% and those for electricity by 8.6%. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have increased by 46.7% in a year. Motor fuels cost 2.8% more than in January last year and increased by 0.7% this month compared to the previous month.

Inflation for services has increased to 6.56% up from 5.80%. Inflation for rents has risen from 4.98% to 5.93%. Food inflation (including alcoholic beverages) now stands at 15.59% compared to 14.53% last month. This inflation has increased sharply in recent months. In January last year, it was still 2.26%.

In particular, inflation for oils, fish, dairy products, bread and cereals and meat has sharply increased in recent months. Inflation for oils stands this month at 28.2%. In January 2022, it was still 6.8%. For fish, inflation is now 15.0% compared to 1.6% in January 2022. Inflation for dairy products amounts to 24.6% this month compared to 2.4% in January 2022. For bread and cereals, inflation stands at 18.3% this month compared to 4.5% in January last year. Inflation for meat amounts to 13.8% this month compared to 1.9% in January 2022.

The decrease in inflation is associated with lower energy prices. Energy inflation goes from 32.88% in December 2022 to 5.21% in January 2023 and accounts for 0.42 percentage points to total inflation, compared to 3.25 the previous month. With an inflation of 15.59%, food products account for 2.95 percentage points.

The price of natural gas has decreased by 27.7% on average compared to the previous month. The price of electricity has decreased by 8.6% on average this month.

Some products and services that rose sharply in price compared to January last year are:

Upward: Inflation
Domestic heating oil 46.7%
Wood and other solid fuels 45.6%
Other edible oils than olive oil (e.g. frying oil) 37.0%
Eggs 34.3%
Margarine and vegetable fats 31.1%
Whole milk 30.6%
Skimmed and semi-skimmed milk 27.6%
Butter 27.3%

Some products and services that fell sharply in price compared to January last year are:

Downward: Inflation
Smartphone -11.2%
Television -10.1%
Other fuels (LPG) -7.6%
Natural gas -7.1%
Other information processing equipment (e.g. smartwatch) -4.0%
Software -3.1%
Motor vehicle insurance -2.7%
Petroleum gas -1.0%

The main group with the largest upward effect [i] on inflation in January was “Food and non-alcoholic beverages” with an effect of 1.73 percentage points. The largest downward effect was measured for “Housing, water and energy”with -0.67 percentage points.

The main group with the largest contribution [ii] to inflation is “Food and non-alcoholic beverages” with 2.83 percentage points. The lowest contribution to inflation was registered by the main group “Education”, with 0.01 percentage points.

 

Comment on the level of the indices

The consumer price index increased by 0.12 points or 0.09% in January 2023 and now stands at 127.84 points, compared to 127.72 points in December 2022 (2013=100). The health index has increased by 0.11 points to 128.00 points in January, compared to 127.89 points in December. The smoothed health index amounted to 125.26 points in January. The next central index for public service and social benefits is set at 125.60 points.

The most significant price increases in January were registered for bread and cereals, dairy products, health insurances, meat, non-alcoholic beverages, fire insurances, nursing care, personal care, bundled telecommunication services and fruit. However, natural gas and electricity have had a decreasing effect on the index.

The most important trends this month are:

Upward: Effect: Downward: Effect:
Bread and cereals +0.255 points Natural gas -1.145 points
Milk, cheese and eggs +0.120 points Electricity -0.515 points
Health insurance +0.115 points   -
Meat +0.105 points    
Non-alcoholic beverages +0.100 points    
Fire insurance +0.095 points    
Nursing care +0.090 points    
Personal care +0.090 points    
Bundled telecom services +0.080 points    
Fruit +0.080 points    

Prices for bread and cereals increased by 6.7% on average this month. The price of dairy products soared in January by 4.3% on average. Health insurances were on average 7.5% more expensive this month. Meat has increased by 2.2% on average. Non-alcoholic beverages were on average 4.6% more expensive in January. Fire insurances experienced a price increase of 5.2% on average. Nursing care increased by 7.0% and personal care by 2.6% on average. Prices for bundled telecommunication services increased by 2.6% on average and fruit cost 4.9% more in January.

Prices for natural gas and electricity decreased by 27.7% and 8.6% respectively this month.

2013 = 100 October November December January
Consumer price index 128.21 127.92 127.72 127.84
Inflation 12.27% 10.63% 10.35% 8.05%
Health index 127.92 127.44 127.89 128.00
Smoothed health index* 122.22 123.47 124.50 125.26
* defined in the law of 23 April 2015 on the promotion of employment (Belgian Official Journal of 27 April 2015)


[i] The effect on inflation shows the changes on the inflation rate by including this product group in the CPI calculation. The effect not only takes the weight of the product group into account, but it also takes into account whether the product group inflation is higher or lower than that of the total expenditure (overall CPI).

[ii] 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.