January 2024: annual update of the consumer price index (CPI) with reference year 2013 = 100

January 2024: annual update of the consumer price index (CPI) with reference year 2013 = 100

The consumer price index (CPI) with reference year 2013 = 100, which was introduced in January 2014, is a chain index that is updated every year in January. The purpose of the annual updates is to keep the CPI representative over time and to avoid misrepresenting the measured inflation as the index ages.

For the CPI with reference year 2013 = 100, this is the tenth update in a row. With a chain index, the choice of the reference year, i.e. the year in which the average of the index equals 100, is purely mathematical. The current reference year is 2013, which means that the average of the indices at all levels is 100 for that year.

The representativeness and the quality of the chain index are guaranteed over time, among others by keeping the product basket up-to-date, further refining calculation methods, integrating new price sources and by keeping a representative shop sample.

This is an overview of the changes for 2024. The Index Commission, composed of academics and representatives of the social partners, gave a unanimous positive opinion on this to the Minister of Economy. The Minister follows this opinion and the changes will therefore be implemented by Statbel in the consumer price index of January 2024.

Changes to the CPI in 2024

1. Continued use of scanner data and web scraping

Since 2015, Statbel has started with the progressive integration of scanner data and web scraping (so-called big data) as data sources for the CPI calculation. The use of scanner data (cash register data) and web scraping (automatically scraping data from web pages) improves the accuracy of the CPI. Indeed, the price index of a product group should no longer be based on a relatively limited sample of products, but we can process the prices of multiple items sold. This method results in an index that more closely matches actual consumption habits.

The use of scanner data and web scraping also means that the annual addition or deletion of products for the groups concerned is no longer necessary. An example: where previously only 3 products were followed for women's footwear (low shoes, boots and tennis shoes), since 2021 web scraping covers the entire range of footwear (ankle boots, boots, bottines, walking shoes, sandals, sneakers, slippers, etc.).

The table below provides an overview of the segments, together with their weight share in 2024, for which the price evolution is measured with scanner data or web scraping. This comes to a total share of 35% of the weight of the basket.

From January 2024, the classic price recordings in the group 06.1.2 Other pharmaceutical products (patches, ice packs, fever thermometers, condoms, etc.) will be supplemented with scanner data.

2. New product group in the basket

First, it should be noted that the concept of “representative item” has become obsolete with the use of scanner data and web scraping. Indeed, for the relevant product groups, virtually the whole range is now captured, so the “sample” retains its representativeness. After all, instead of the traditional items, product segments are now monitored that contain a multiple of the previous items.

From 2024 onwards, an additional group 01.1.8.6 Artificial sugar substitutes is added to section 01.1.8 Sugar, jam, honey, chocolate and confectionery. This section previously consisted of five subgroups.

• 01.1.8 Sugar, jam, honey, chocolate and confectionery
  • 01.1.8.1 Sugar
  • 01.1.8.2 Jams, marmalades and honey
  • 01.1.8.3 Chocolate
  • 01.1.8.4 Confectionery products
  • 01.1.8.5 Ice cream and sorbet
  • 01.1.8.6 Artificial sugar substitutes

3. Medicines: adaptation of calculation methodology

Regarding medicines or proprietary medicinal products, the calculation methodology has been slightly adjusted: indeed, from 2024 onwards, the whole sample of all medicines will be updated annually instead of only that of (partially) refundable medicines.

The sample of refundable proprietary medicinal products was already updated annually in January using the INAMI-RIZIV database. However, no suitable database was available for medicines without INAMI-RIZIV contribution until recently. Consequently, for non-refundable medicines, replacements were made only if a medicine disappeared from the market. For non-refundable medicines, data have recently become available via the “MediPrices” database managed by the FPS Economy. As a result, from now on, the entire sample of 200 medicines can be updated annually.

4. Weighting scheme 2024

Since 2020, the weighting scheme was based on the 2018 household budget survey. From 2024 onwards, the 2022 household budget survey, the results of which were published in September last year, will be used.

Since a chain index is used, in which the prices of the 12 months of the current year are always compared with December of the previous year, the weighting scheme must be adjusted annually to the year of the reference month. This is done on the basis of the price evolution between the year in which the values are expressed, to the same year as the reference month. This procedure is described in the literature as the price update of the weights.

The weights based on the 2022 HBS were updated to December 2023, based on the price evolution of each product group, since December 2023 is the new reference month for the chain index in 2024.

The table below compares the new weights for 2024 with those for 2023. The large fluctuations for the 12 main groups of the index basket are caused by lower energy prices (contained in group 4 and group 7), which result in an increase in the relative weight of the other groups. The relative share of energy in the index basket goes from 13.52% to 7.87%, a decrease of 42%.

Evolution of the basket weights of the index from 2023 to 2024