Consumer price index

Inflation increases to 8.97%

Consumer prices
Inflation increases to 8.97%

Consumer price index of May 2022

  • Inflation rose from 8.31% to 8.97% in May, reaching its highest level since August 1982, when it stood at 9.02%.
  • The consumer price index this month increases by 0.92 points or 0.77%.
  • Inflation based on the health index goes from 7.81% to 8.34%.
  • The smoothed health index amounts to 117.02 points in May.
  • The high inflation this month, as in recent months, is largely due to high energy prices. Energy currently has an inflation rate of 56.80% and accounts for 4.80 percentage points of the total inflation.
  • Furthermore, inflation for food products has also sharply increased in recent months. Inflation for food products (including alcoholic beverages) stands at 6.32% this month, compared to 5.09% last month. The contribution of food products to inflation currently amounts to 1.26 percentage points.
  • Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 4.43% in May, compared to 4.08% in April.
  • The most significant price increases in May were registered for motor fuels, electricity, private rent, domestic heating oil, restaurants and cafés, milk, cheese and eggs, the purchase of vehicles, alcoholic beverages, travels abroad and city trips and fish and seafood. However, natural gas and chlothing have had a decreasing effect on the index.

Inflation

Inflation in May stands at 8.97%. This is an increase compared to March and April, when it was 8.31%. Inflation based on the health index amounts to 8.34% this month compared to 7.81% in April and 7.68% in March. Inflation without energy has increased to 4.53% in May compared to 4.06% last month and 3.80% in March. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, amounts to 4.43% in May, compared to 4.08% in April and 3.75% in March.

Core inflation and inflation without energy

Inflation for services has risen from 3.96% to 4.31%. Inflation for rents increased from 2.62% to 2.93%. Inflation for food products (including alcoholic beverages) stands at 6.32% this month, compared to 5.09% last month. Inflation for food products (including alcoholic beverages) has sharply increased in recent months. In November, it was still only 0.47%. Inflation for bread, cereals and other edible oils (including frying oil) in particular has sharply increased these past few months. For example, inflation for bread stands at 11.8% this month, while it was still 1.7% in November. For flour and cereals, it now stands at 11.9% compared to 0.6% in November. Inflation for other edible oils amounts to 26.5% this month compared to 13.1% in November.

Inflation for food and some subgroups

The sharp increase in inflation in recent months is largely due to energy products. Energy inflation is now running at 56.80%, against 54.11% last month and 57.22% in March. Electricity is now 54.44% more expensive than a year ago. Natural gas is 130.60% more expensive than in May last year. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have increased by 61.22% in one year. Motor fuels are 31.95% more expensive than last year.

The high inflation is mainly due to the high energy prices. Energy currently has an inflation rate of 56.80% and accounts for 4.80 percentage points of the total inflation.

Contibution of energy to inflation

The price of natural gas has decreased by 2.03% on average compared to the previous month. Prices for electricity have gone up by 3.17% on average this month.

Indices for electricity and natural gas

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

Upward: Inflation
Natural gas 130.6%
Other fuels (LPG) 64.2%
Domestic heating oil 61.2%
Electricity 54.4%
Diesel 34.4%
Holiday villages 32.7%
Petrol 29.2%
Other edible oils (including frying oil) 26.5%

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

Downward: Inflation
Television set -13.9%
Smartphone -8.2%
Other information processing equipment (e.g. smart watch) -6.9%
Recording media (a.o. memory card) -6.7%
Software -5.2%
Women’s clothing -3.9%
Insurance vehicles -3.3%
Mobile telephone services -3.0%

The main group with the largest upward effect[i] on inflation in May was ‘housing, water, energy’ with an effect on inflation of 3.26 percentage points. The largest downward effect was measured for ‘Clothing’ with -0.59 percentage points.

Effect on inflation

The main group with the largest contribution[ii] to inflation is ‘housing, water and energy’ with 4.20 percentage points. The lowest contribution to inflation comes from the group ‘Clothing’, with -0.04 percentage points.

Contribution to inflation

The first inflation estimate according to the European harmonised index of consumer prices (HICP flash estimate) for Belgium amounts to 9.9% for May 2022. The difference in inflation between the CPI and the HICP is mainly due to another calculation method for domestic heating oil.

Comment on the level of the indices

Index evolution

The consumer price index has increased by 0.92 points or 0.77% in May 2022 and now amounts to 121.01 points, compared to 120.09 points in April 2022 (2013=100). The health index has gone up by 0.66 points to 120.25 points in May, compared to 119.59 points in April. The smoothed health index amounts to 117.02 points in May. The next central index for public service and social benefits is set at 118.36 points.

The most significant price increases in May were registered for motor fuels, electricity, private rent, domestic heating oil, restaurants and cafés, milk, cheese and eggs, the purchase of vehicles, alcoholic beverages, travels abroad and city trips and fish and seafood. However, natural gas and chlothing have had a decreasing effect on the index.

The most important trends this month are:

Upward: Effect: Downward: Effect:
Motor fuels +0.225 points Natural gas -0.055 points
Electricity +0.135 points Clothing -0.050 points
Private rent +0.080 points    
Domestic heating oil +0.075 points    
Restaurants and cafés +0.070 points    
Milk, cheese and eggs +0.070 points    
Purchase of vehicles +0.065 points    
Alcoholic beverages +0.060 points    
Travels abroad and city trips +0.055 points    
Fish and seafood +0.055 points    

Motor fuels became on average 4.8% more expensive. Prices for electricity have gone up by 3.2% on average this month. Private rents increased on average by 0.9% this month. Domestic heating oil prices have gone up by 5.3% on average this month. In May, restaurants and cafés registered an average price increase of 0.9%. Milk, cheese and eggs cost this month on average 2.9% more. The purchase of vehicles became on average 0.8% more expensive this month. Alcoholic beverages were on average 2.9% more expensive in May. The price of travels abroad and city trips has increased this month by 2.7% on average. Fish and seafood have become on average 4.2% more expensive.

Natural gas has become on average 2.0% less expensive and prices for clothing have decreased by 1.0% on average.

2013 = 100 February March April May
Consumer price index 119.07 119.69 120.09 121.01
Inflation 8.04% 8.31% 8.31% 8.97%
Health index 118.74 119.05 119.59 120.25
Smoothed health index* 114.60 115.54 116.52 117.02
* 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 HICP).

[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.

Indices
Content

Consumer price index, inflation, health index, health index (moving average), index without energy and petroleum, last 13 months

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Base year
Inflation
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4 groups
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Purpose and brief description

The consumer price index is an economic indicator whose main task is to objectively reflect the price evolution over time for a basket of goods and services purchased by households and considered representative of their consumer habits. The index does not necessarily measure the price level of this basket for a specific period of time, but rather the fluctuation between two periods, the first one acting as basis for comparison. Moreover, this difference in the price level is not measured in absolute, but in relative terms. The consumer price index can be determined as a hundred times the ratio between the observed prices of a range of goods and services at a given time and the prices of the same goods and services, observed under the same circumstances during the reference period, chosen as basis for comparison. Price observations always take place in the same regions.

Since 2014, the consumer price index has been a chain index in which the weighting reference period is regularly shifted and prices and quantities are no longer compared between the current period and a fixed reference period, but the current period is compared with an intermediate period. By multiplying these short-term indices, and so creating a chain, we get a long-term series with a fixed reference period.

Population

Belgian private households

Data collection method and possible sampling

Survey technique applied using a computer, based on the use of electronic questionnaires and laptops.

Frequency

Monthly.

Timing of publication

The results are available on the penultimate working day of the reference period.

Definitions

Weight (CPI): The weight represents the importance of the goods and services included in the CPI in the total expenditure patterns of the households. Weights are determined based on the household budget survey.

Consumer price index (CPI): The consumer price index is an economic indicator whose main task is to objectively reflect the price evolution over time for a basket of goods and services purchased by households and considered representative of their consumer habits.

Health index: The health index is derived from the consumer price index and has been published since January 1994. The current value of this index is determined by removing a number of products from the consumer price index product basket, in particular alcoholic beverages (bought in a shop or consumed in a bar), tobacco products and motor fuels except for LPG.

Inflation: Inflation is defined as the ratio between the value of the consumer price index of a given month and the index of the same month the year before. Therefore, inflation measures the rhythm of the evolution of the overall price level.

Consumer price index without petroleum products: This index is calculated by removing the following products from the consumer price index: butane, propane, liquid fuels and motor fuels.

Consumer price index without energy products: This index is calculated by removing the following products from the consumer price index: electricity, natural gas, butane, propane, liquid fuels, solid fuels and motor fuels.

Smoothed index: The smoothed index is the arithmetic mean of the health index of the last 4 months. The smoothed index is used as basis for the indexation of retirement pensions, social allowances and some wages and salaries. The indexations of public services wages and social benefits are implemented when the smoothed index reaches a certain value, the so-called central index. When the smoothed index reaches the central index, the benefits increase by 2 % the following month. The wages in the public sector also increase by 2 % two months after the central index was reached.

The central index is a predetermined threshold value against which the smoothed health index is compared. If the central index is reached or exceeded, there is an indexation of the wages and salaries or benefits. This indexation is proportional to the percentage between the old and the new central index. For the public sector and social benefits, the difference between the central indices always amounts to 2 %. Therefore, a 2 % indexation is applied every time the central index is reached. There are also collective labour agreements according to which the difference between the central indices amounts to 1 % or 1.5 %. The reaching of a central index then leads to an indexation of 1 % or 1,5 %.
See also: https://persopoint.be/nl/diensten/loonadministratie/index/algemene-principes-indexatie
And: https://persopoint.be/fr/services/administration-des-salaires/principes-generaux-de-l-index

An 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).

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.

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