Inflation increases and amounts to 0.89 %
Consumer price index of March 2021
- Inflation increases from 0.46 % to 0.89 % in March.
- The consumer price index this month increases by 0.30 points or 0.27 %.
- Inflation based on the health index has increased to 0.55 % from 0.47 %.
- The smoothed health index stood at 108.09 points in March.
- Inflation for food products and non-alcoholic beverages remains negative and currently stands at -0.58 %.
- The most significant price increases in March were registered for motor fuels, fruit, electricity, confectionery, tobacco and bread and cereals. However, bundled telecommunication services, alcoholic beverages, flowers and plants, fish and seafood and vegetables have had a decreasing effect on the index.
- The current measures due to the COVID-19 had an impact on the calculation of the index. More information is available here. In practice, this means that for the month of March there is an increasing effect on the index for travels abroad due to the carry forward of prices with last year’s seasonal correction factor. For hotel rooms, there is a decreasing effect on the index for the same reason.
The consumer price index amounts to 110.51 points in March 2021. It has increased by 0.30 points over the month. Inflation has gone up to 0.89 % from 0.46 %. The health index gained 0.17 points and is now at 110.56 points. Inflation based on the health index has increased to 0.55 % from 0.47 %. The most significant price increases were registered for motor fuels, fruit, electricity, confectionery, tobacco and bread and cereals. However, bundled telecommunication services, alcoholic beverages, flowers and plants, fish and seafood and vegetables have had a decreasing effect on the index.
The consumer price index has risen by 0.30 points or 0.27 % in March 2021 and is now running at 110.51 points, compared to 110.21 points in February 2021 (2013=100). The health index has gained 0.17 points to 110.56 points in March, compared to 110.39 points in February. The smoothed health index stood at 108.09 points in March. The next central index for public service and social benefits is set at 109.34 points.
Products with the largest upward effect in March were motor fuels, fruit, electricity, confectionery, travels abroad and city trips, tobacco and bread and cereals. However, bundled telecommunication services, alcoholic beverages, hotel rooms, flowers and plants, fish and seafood and vegetables have had a decreasing effect on the index. The most important trends this month are:
|Motor fuels||+0.175 points||Bundled telecom services||-0.060 points|
|Fruit||+0.120 points||Alcoholic beverages||-0.050 points|
|Electricity||+0.060 points||Hotel rooms (*)||-0.050 points|
|Sugar, jam and chocolate||+0.045 points||Flowers and plants||-0.035 points|
|Travels abroad and city trips (*)||+0.035 points||Fish and seafood||-0.030 points|
|Tobacco||+0.025 points||Vegetables, incl. potatoes||-0.020 points|
|Bread and cereals||+0.020 points|
(*) consequence of the carry forward of prices with a seasonal correction factor
Motor fuels became on average 4.8 % more expensive. Prices for fruit have increased on average by 7.0 %. Electricity is on average 1.8 % more expensive than last month. Prices of sugar, jam and chocolate have gone up on average by 3.6 %. Tobacco has become on average 3.0 % more expensive. Prices of bread and cereals have increased on average by 0.7 %.
Prices for bundled telecommunication services have decreased on average by 2.0 %. Prices of alcoholic beverages have decreased on average by 2.5 % compared to the previous month. Flowers and plants have become 6.1 % cheaper. Prices of fish and seafood have gone down by on average 2.3 % compared to last month. Vegetables have been on average 1.0 % less expensive compared to the previous month.
Note about inflation for commonly purchased products
The table below shows the inflation of a number of commonly purchased product groups. For almost all commonly purchased products, inflation has been sharply decreasing since the last quarter of last year. This decrease in inflation is due to the fact that the effect of the price decreases in the second semester 2019 has faded away. See the analysis on ‘Measuring inflation during the coronavirus crisis’ for a discussion on this effect. Since the previous month, the inflation for most product groups has even been negative, which means that prices are lower than a year ago.
|COICOP||Name||Weight in the basket (on 1000)||Dec/2020||Jan/2021||Feb/2021||March/2021|
|1||Food and non-alcoholic beverages||178.87||1.61%||1.24%||-0.21%||-0.58%|
|05.6.1||Non-durable household goods||8.92||-1.11%||0.76%||-2.99%||0.99%|
|05.6.1.1||Cleaning and maintenance products||5.71||-2.21%||1.03%||-4.07%||2.13%|
|05.6.1.2||Other non-durable small household articles||3.21||0.92%||0.27%||-0.95%||-1.04%|
|09.3.4||Pets and related products||7.46||0.60%||0.91%||-0.06%||0.13%|
|12.1.3||Other appliances, articles and products for personal care||14.56||-0.27%||1.27%||-1.25%||-1.37%|
|220.127.116.11||Non-electrical appliances for personal care||0.76||0.76%||2.12%||1.05%||0.82%|
|18.104.22.168||Articles for personal hygiene and wellness, esoteric products and beauty products||13.80||-0.32%||1.22%||-1.39%||-1.49%|
Also when compared to March 2020 based on price recordings carried out at the beginning of the coronavirus crisis, prices have been lower for a while. This is also the case this month. For example, prices for food products are currently on average 0.5 % lower than in March 2020. Compared to April 2020, when the temporary ban on discounts was in force, prices are still lower. For example, food products are 2.2 % cheaper compared to April 2020, and cleaning and maintenance products are even 4.1 % less expensive.
|COICOP||Name||Weight in the basket (on 1000)||Price change March ‘21 vs March ‘20||Price change March ‘21 vs April ‘20||Price change March ‘21 vs Feb. ‘21|
|1||Food and non-alcoholic beverages||178.87||-0.6%||-2.1%||0.8%|
|05.6.1||Non-durable household goods||8.92||1.0%||-3.8%||1.1%|
|05.6.1.1||Cleaning and maintenance products||5.71||2.1%||-4.1%||1.3%|
|05.6.1.2||Other non-durable small household articles||3.21||-1.0%||-3.2%||0.7%|
|09.3.4||Pets and related products||7.46||0.1%||0.2%||0.3%|
|12.1.3||Other appliances, articles and products for personal care||14.56||-1.4%||-1.4%||1.0%|
|22.214.171.124||Non-electrical appliances for personal care||0.76||0.8%||5.2%||-0.8%|
|126.96.36.199||Articles for personal hygiene and wellness, esoteric products and beauty products||13.80||-1.5%||-1.7%||1.1%|
Note about overall inflation
Inflation now stands at 0.89 % compared to 0.46 % last month and 0.26 % in January. Inflation based on the health index amounted to 0.55 % this month compared to 0.47 % in February and 0.57 % in January. Inflation without energy went down to 0.76 % in March, compared to 0.87 % in February and 1.10 % in January. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stood at 0.96 % in March, compared to 1.01 % in February and 1.15 % in January.
Energy inflation is now running at 2.27 %, compared to -3.60 % last month and -7.85 % in January. Electricity is now 4.4 % more expensive than a year ago. Natural gas is 7.1 % more expensive on an annual basis. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have declined by 30.3 % over a year. Motor fuels are 9.7 % more expensive than last year. Inflation for services has declined to 1.16 % from 1.23 %. Inflation for rents amounted to 2.13 % in February and has decreased to 1.81 % in March.
Some products and services that rose sharply in price compared to March last year are:
|Other fuels (LPG)||0,372|
|Liquefied petroleum gas (propane)||0,132|
|Fixed telephone services||0,121|
|Charges by banks||0,106|
|Other tobacco products (e.g. loose tobacco)||0,086|
Some products and services that dropped sharply in price compared to March last yeare are:
|Domestic heating oil||-30.3%|
|Pre-recorded media storage (blu-ray, dvd)||-13.1%|
|Holiday centres, camping sites and youth hostels||-11.9%|
|Other information processing equipment (e.g. smart watch)||-8.7%|
The main group with the largest upward effect[i] on inflation in March was "Transport" with an effect of 0.44 percentage points. The largest downward effect was measured for “Food and non-alcoholic beverages” with
-0.32 percentage points.
The main group with the largest contribution[ii] to inflation is "Transport" with 0.50 percentage points. The lowest contribution to inflation was registered by "Food and non-alcoholic beverages", with -0.10 percentage points.
|2013 = 100||December||January||February||March|
|Consumer price index||109.49||109.97||110.21||110.51|
|Smoothed health index*||107.72||107.86||107.93||108.09|
|* defined in the law of 23 April 2015 on the promotion of employment (Belgian Official Journal of 27 April 2015)|
The first inflation estimate according to the European harmonised index of consumer prices (HICP flash estimate) for Belgium amounts to 1.6% in March.
[i] 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.
[ii] 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).
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.
Belgian private households
Data collection method and possible sampling
Survey technique applied using a computer, based on the use of electronic questionnaires and laptops.
Timing of publication
The results are available on the penultimate working day of the reference period.
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
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.
- Monthly survey of consumer prices by surveyors in stores.pdf
- Enquête 'Private huur'.pdf
- Enquête 'sociale huur'.pdf