Consumer price index

Inflation increases from 2.73% to 2.86%

Consumer prices
Inflation increases from 2.73% to 2.86%

Consumer price index - September 2021

  • Inflation increases from 2.73% to 2.86% in September.
  • The consumer price index decreased by 0.28 points or 0.25% this month.
  • Inflation based on the health index goes from 2.30% to 2.29%.
  • The smoothed health index stood at 109.89 points in September.
  • Inflation for food products and non-alcoholic beverages is negative for the eighth month in a row and currently stands at -0.99%. Energy inflation is now running at 19.37%.
  • Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stood at 1.61% in September, compared to 1.65% in August.
  • The most significant price increases in September were recorded for alcoholic beverages, motor fuels, domestic heating oil, private rent and maintenance and repair of personal transport equipment. However, hotel rooms, bread and cereals, confectionery, package holidays in Belgium, non-alcoholic beverages, dairy products and meat have had a decreasing effect on the index.

Inflatie

Inflation is now running at 2.86%, compared to 2.73% in August and 2.27% in July. Inflation based on the health index amounted to 2.29% this month compared to 2.30% in August and 1.83% in July. Inflation without energy went down to 1.35% in September compared to 1.40% last month and 1.13% in July. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stood at 1.61% in September, compared to 1.65% in August and 1.43% in July.

Inflation for food products (including alcoholic beverages) stands at -0.56% this month, compared to -0.27% last month. Inflation for services has declined to 2.02% from 2.19%. Inflation for rents amounted to 2.29% in August and has increased to 2.47% in September.

Core inflation and inflation without energy

The sharp increase in inflation in recent months is due to energy products. Energy inflation is now running at 19.37%, compared to 17.15% in August and 14.66% in July. Electricity is now 17.3% more expensive than a year ago. Natural gas is 48.9% more expensive on an annual basis. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have declined by 4.7% over a year. Motor fuels are 18.5% more expensive than last year.

Contribution of energy to inflation

Prices for natural gas have slightly increased compared to the previous month (+1.0%). However, prices for electricity have slightly decreased (-0.3%).

Indices for electricity and natural gas

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

Upward: Inflation
Other fuels (LPG) 51.2%
Natural gas 48.9%
Diesel 20.0%
Postal mail 18.1%
Electricity 17.3%
Liquefied petroleum gas (propane) 16.8%
Petrol 16.6%
Holiday villages, camping sites and youth hostels 13.7%

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

Downward: Inflation
Hotels -9.8%
Software -9.7%
Other information processing equipment (e.g. smart watch) -9.3%
Televisions -8.7%
Fresh fruit -8.4%
Pizza and quiche -7.8%
Package holidays in Belgium -6.0%
Smartphones -5.6%

The main group with the largest upward effect[i] on inflation in September was ‘Housing, water, energy’ with an effect on inflation of 0.99 percentage points. The largest downward effect was measured for ‘Food and non-alcoholic beverages’ with -0.85 percentage points.

Effect on inflation

The main group with the largest contribution[ii] to inflation is ‘Housing, water and energy’ with 1.31 percentage points. The lowest contribution to inflation was registered by ‘Food and non-alcoholic beverages’, with -0.18 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 3.8% for September 2021, compared to 4.7% in August. The difference in inflation between CPI and HICP is largely due to a different calculation method for domestic heating oil.

Explanation of index levels

Index evolution

The consumer price index has fallen by 0.28 points or 0.25% in September 2021 and is now running at 112.55 points, compared to 112.83 points in August 2021 (2013=100). The health index has gone down by 0.45 points to 112.29 points in September, compared to 112.74 points in August. The smoothed health index stood at 109.89 points in September. The next central index for public service and social benefits is set at 111.53 points.

The largest upward pressure in September came from alcoholic beverages, motor fuels, domestic heating oil, private rent and maintenance and repair of personal transport equipment. However, hotel rooms, bread and cereals, confectionery, package holidays in Belgium, non-alcoholic beverages, dairy products and meat have had a decreasing effect on the index. The most important trends this month are:

Upward: Effect: Downward: Effect:
Alcoholic beverages +0.080 points Hotel rooms -0.215 points
Motor fuels +0.060 points Bread and cereals -0.100 points
Domestic heating oil +0.045 points Confectionery -0.085 points
Private rent +0.040 points Package holidays in Belgium -0.080 points
Maintenance of personal transport equipment +0.040 points Non-alcoholic beverages -0.055 points
    Dairy products -0.055 points
    Meat -0.045 points

Alcoholic beverages were on average 4.1% more expensive this month. Motor fuels became on average 1.5% more expensive this month. Liquid fuels were on average 4.7% more expensive this month. Private rent increased on average by 0.5% this month. The price for the maintenance and repair of personal transport equipment increased on average by 1.2% this month.

Hotel rooms have become 24.5% less expensive this month. Prices for bread and cereals have gone down by 3.0% this month. Prices for confectionery decreased by 6.8% compared to last month. Package holidays in Belgium have become on average 19.2% cheaper. Prices of non-alcoholic beverages have gone down on average by 3.0% this month. Prices for dairy products have gone down by 2.3% this month. Meat has become 1.1% less expensive compared to last month.

2013 = 100 June July August September
Consumer price index 111.30 112.25 112.83 112.55
Inflation 1.63% 2.27% 2.73% 2.86%
Health index 111.31 112.18 112.74 112.29
Smoothed health index* 108.73 109.13 109.57 109.89
* 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: 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.

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