Consumer price index of July 2021

• Inflation increases from 1.63% to 2.27% in July.
• The consumer price index this month increases by 0.95 points or 0.85%.
• Inflation based on the health index has increased to 1.83% from 1.14%.
• The smoothed health index now stands at 109.13 points.
• The increase in inflation is mainly due to increased inflation for energy.
• Inflation for food products and non-alcoholic beverages remains negative and currently stands at -0.87%.
• In July, the main price increases were recorded for electricity, natural gas, motor fuels, hotel rooms, plane tickets, travels and city trips abroad, package holidays in Belgium, holiday villages and camping sites, restaurants and cafés, fire insurance, potatoes and fish and seafood. Rent and personal care products, on the other hand, had a decreasing effect on the index.

The consumer price index is running at 112.25 points in July 2021. It has increased by 0.95 points over the month. Inflation has gone up to 2.27% from 1.63%. The health index gained 0.87 points and is now at 112.18 points. Inflation based on the health index has increased to 1.83% from 1.14%. The main price increases were recorded for electricity, natural gas, motor fuels, hotel rooms, plane tickets, travels and city trips abroad, package holidays in Belgium, holiday villages and camping sites, restaurants and cafés, fire insurance, potatoes and fish and seafood. Rent and personal care products, on the other hand, had a decreasing effect on the index.

The consumer price index has increased by 0.95 points or 0.85% in July 2021 and now stands at 112.25 points, against 111.30 points in June 2021 (2013=100). The health index has gone up by 0.87 points to 112.18 points in July, compared to 111.31 points in June. The smoothed health index now stands at 109.13 points. The next central index for public service and social benefits is set at 109.34 points.

The products with the largest increasing effect in July are electricity, natural gas, motor fuels, hotel rooms, plane tickets, travels and city trips abroad, package holidays in Belgium, holiday villages and camping sites, restaurants and cafés, fire insurance, potatoes and fish and seafood. Private rent and personal care products, on the other hand, had a decreasing effect on the index. The most important trends this month are:

Electricity and natural gas became on average 4.8% and 7.2% more expensive this month respectively. Motor fuels became on average 3.1% more expensive this month. Hotel rooms and plane tickets rose by an average of 15.1% and 17.3% respectively. Travels and city trips abroad became on average 3.2% more expensive. Package holidays in Belgium have become 13.3% more expensive on average. Holiday villages and camping sites have become more expensive on average by 8.5%. The increase in prices for travel-related products is mainly due to the summer holidays. The price of fire insurance has increased by an average of 2.3%. Potatoes and fish and seafood have become more expensive by an average of 8.4% and 2.5% respectively.

Private rent decreased on average by 0.4% this month. Personal care products became 1.4% cheaper than last 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. See the analysis on ‘Measuring inflation during the coronavirus crisis’ for a discussion on this effect. Since February, inflation for most product groups has even been negative, which means that prices are lower than in the same month a year ago. Food product prices are currently on average 0.96% lower than in July 2020. Articles for personal hygiene are 2.67% less expensive and non-durable household articles are 3.15% cheaper.

Note about overall inflation

Inflation is now running at 2.27%, compared to 1.63% in June and 1.46% in May. Inflation based on the health index amounted to 1.83% this month compared to 1.14% in June and 0.81% in May. Inflation without energy has increased to 1.13% in July compared to 0.91% in June and 0.67% in May. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 1.43% in July, compared to 1.10% in June and 1.00% in May.

Inflation for food products (including alcoholic beverages) stands at -0.88% this month, compared to -1.21% last month. Energy inflation is now running at 14.66%, compared to 10.80% in June and 10.21% in May. Electricity is now 15.3% more expensive than a year ago. Natural gas is 38.8% more expensive on an annual basis. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have declined by 15.9% over a year. Motor fuels are 15.6% more expensive than last year. Inflation for services has risen to 2.12% from 1.51%. Inflation for rents remained virtually unchanged at 2.01% in June and 2.00% in July.

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

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

The main group with the largest upward effect^[i] on inflation in July was ‘housing, water, energy’ with an effect on inflation of 0.69 percentage points. The largest downward effect was measured for “Food and non-alcoholic beverages” with -0.70 percentage points.

The main group with the largest contribution^[ii] to inflation is “housing, water and energy” with 0.96 percentage point. The lowest contribution to inflation was registered by "Food and non-alcoholic beverages", with -0.16 percentage points.

The first inflation estimate according to the European harmonised index of consumer prices (HICP flash estimate) for Belgium amounts to 1.4% for July 2021, compared to 2.6% in June. The temporary drop in inflation for the HICP this month is due to last year's shift of the sales from July to August. For the same reason, HICP inflation in August will be temporarily significantly higher.

^[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.