Consumer price index

Inflation down to 2.34% from 2.78%

Consumer prices
Inflation down to 2.34% from 2.78%

Consumer price index of December 2018

  • Inflation decreased from 2.78% to 2.34% in December.
  • The consumer price index has decreased by 0.26 point or 0.24% this month.
  • Inflation based on the health index has declined from 2.48% to 2.17%.
  • The smoothed health index amounted to 106.01 points in December.
  • The most significant price increases in December were registered for holiday villages, travels abroad, meat, airplane tickets, vegetables and the purchase of vehicles. However, motor fuels, electricity, natural gas, fruit, alcoholic beverages and bundled telecommunication services have had a decreasing effect on the index.

The consumer price index amounts to 108.22 points in December 2018. The index has decreased by 0.26 point over the month. Inflation has dropped from 2.78% to 2.34%. The health index has decreased by 0.03 point this month and now stands at 108.45 points. Inflation based on the health index has fallen to 2.17% from 2.48%. The most significant price increases this month were registered for holiday villages, travels abroad, meat, airplane tickets, vegetables and the purchase of vehicles. These increases have been mostly offset by price decreases for motor fuels, electricity, natural gas, fruit, alcoholic beverages and bundled telecommunication services.

The consumer price index has declined by 0.26 point or 0.24% in December 2018 and now amounts to 108.22 points, compared to 108.48 points in November 2018 (2013=100).

CPI_1graph201812_en.png

The health index has gone down by 0.03 points to 108.45 points in December, compared to 108.48 points in November. The smoothed health index amounted to 106.01 points in December. The central index for public service and social benefits, set at 107.20 points, has therefore not been reached this month. The last time the central index was exceeded was in August 2018.

Products with the largest increasing effect compared to last month are holiday villages, travels abroad, meat, airplane tickets, vegetables and the purchase of vehicles. Motor fuels, electricity, natural gas, fruit, alcoholic beverages and bundled telecommunication services provided the largest downward pressure compared to last month. The most important trends this month are:

Upward: Effect: Downward: Effect:
Holiday villages +0.050 point Motor fuels -0.210 point
Travels abroad +0.035 point Electricity -0.145 point
Meat +0.035 point Natural gas -0.055 point
Airplane tickets +0.030 point Fruit -0.045 point
Vegetables +0.025 point Alcoholic beverages -0.035 point
Purchase of vehicles +0.025 point Bundled telecommunication services -0.035 point

Stays in holiday villages cost on average 6.7% more than last month. Travels abroad have increased on average by 2.1%. Meat became 0.8% more expensive.  Airplane tickets increased on average by 5.1% this month. Prices for vegetables have increased on average by 1.4%. The purchase of vehicles became 0.3% more expensive compared to last month.

Motor fuels have been on average 5.5% less expensive compared to the previous month. Electricity has become on average 3.3% less expensive. The price of natural gas is 2.5% lower than last month. Fruit has become 3.4% less expensive. Prices of alcoholic beverages have decreased on average by 2.2%. Bundled telecommunication services were 1.2% less expensive compared to last month.

Inflation now amounts to 2.34% compared to 2.78% in November and 2.75% in October. Inflation based on the health index amounted to 2.17% this month compared to 2.48% in November and 2.29% in October. Inflation without energy has gone down to 1.59% in December compared to 1.66% in November and 1.52% in October. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 1.62% in December, against 1.63% in November and 1.40% in October.

Inflation of food now amounts to 1.56%, compared to 1.94% last month and 2.63% in October. Fresh fruit now costs 0.5% less than in December 2017. Fresh vegetable prices are also on the rise: 4.0% on an annual basis. Fish and shellfish are 1.4% more expensive than in December 2017. Prices have increased by 2.7% for non alcoholic beverages and also by 2.7% for alcoholic beverages. Tobacco prices have gone up by 6.4% compared to December last year. Energy inflation is now running at 8.85%, down from 12.58% in November and 13.75% in October. Electricity is now 6.4% more expensive than a year ago. Natural gas is 14.6% more expensive than in December 2017. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have increased by 17.7% in a year. Motor fuels are 5.6% more expensive than last year. Inflation for services has gone down to 2.05% from 2.11%. Inflation for rents has slightly decreased and now stands at 0.87%, compared to 0.96% in November.

The following products and services have registered the sharpest price increases compared to last year in December:

Upward: Inflation:
Domestic heating oil 17.7%
Natural gas 14.6%
Postal mail 13.5%
Other tobacco products (e.g. loose tobacco) 13.3%
Newspapers 12.3%
Diesel 12.2%
Potatoes 11.2%
Package holidays abroad 8.4%
Dental care 7.9%
Museums, libraries, zoological gardens 7.4%
Propane 7.1%
Fixed telephone services 6.8%
Electricity 6.4%

The following products and services have registered the sharpest price decreases compared to last year in December:

Downward: Inflation:
Eggs -10.4%
Other fuels (LPG) -7.4%
Smoked fish -5.3%
Tea -5.2%
Frozen vegetables, excluding potatoes -5.0%
Other information processing equipment (e.g. smart watch) -4.6%
Personal computers (laptops) -4.3%
Video equipment (TV, ...) -4.1%
Mobile phones -3.8%
Dried fruit and nuts -3.6%
Fruit wine (cider) -3.3%
Pre-recorded media storage (Bluray, DVD, …) -3.1%

The main group with the largest upward effect on inflation in December was housing, water, energy with an effect on inflation of 0.51 percentage point. The largest downward effect was measured for "food and non-alcoholic beverages" (-0.17 percentage point).

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The main group with the largest contribution[ii] to inflation is housing, water and energy with 0.85 percentage point. The lowest contribution to inflation was registered by the main group communication, with 0.00 percentage point.

CPI_3graph201812_en.png

 

CPI_4graph201812_en.png

2013 = 100 September October November December
Consumer price index 107.58 108.31 108.48 108.22
Inflation 2.35% 2.75% 2.78% 2.34%
Health index 107.52 108.26 108.48 108.45
Smoothed health index* 105.23 105.54 105.79 106.01
* defined in the law of 23 April 2015 on the promotion of employment (Belgian Official Journal of 27 April 2015)
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: http://www.wedden.fgov.be/indexation/default.htm
And: http://www.traitements.fgov.be/indexation/default.htm

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.

Metadata

consumptieprijsindex_0.svg

Inflation in December
2.34%

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