Inflation increases from 2.35% to 2.75%
Consumer price index of October 2018
- Inflation increased from 2.35% to 2.75% in October.
- Inflation rises mainly due to price increases for electricity and natural gas.
- The consumer price index has increased by 0.73 point or 0.68% this month.
- Inflation based on the health index has increased to 2.29%, up from 1.91%.
- The smoothed health index stood at 105.54 points in October.
- The main upward pressure in October came from electricity, natural gas, motor fuels, domestic heating oil, bread and cereals, fruit and holiday villages. However, products for pets and alcoholic beverages have had a decreasing effect on the index.
The consumer price index amounts to 108.31 points in October 2018. It has increased by 0.73 point over the month. Inflation has gone up to 2.75% from 2.35%. The health index has gained 0.74 point to 108.26 points. Inflation based on the health index has gone up from 1.91% to 2.29%. The main upward pressure this month came from electricity, natural gas, motor fuels, domestic heating oil, bread and cereals, fruit and holiday villages. These increases were mostly offset by price decreases for products for pets and alcoholic beverages.
The consumer price index has risen by 0.73 points or 0.68% in October 2018 and is now running at 108.31 points, compared to 107.58 points in September 2018 (2013=100).
The health index in October has gone up by 0.74 points to 108.26 points, compared to 107.52 points in September. The smoothed health index stood at 105.54 points in October. 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 in October are electricity, natural gas, motor fuels, domestic heating oil, bread and cereals, fruit and holiday villages. Products for pets and alcoholic beverages provided the largest downward pressure compared to last month. The most important trends this month are:
|Electricity||+0.260 point||Products for pets||-0.035 point|
|Natural gas||+0.150 point||Alcoholic beverages||-0.025 point|
|Motor fuels||+0.070 point|
|Domestic heating oil||+0.050 point|
|Bread and cereals||+0.040 point|
|Holiday villages||+0.030 point|
Prices of electricity have increased on average by 6.5%. Prices for natural gas have increased on average by 7.5%. Motor fuels have become 1.9% more expensive compared to last month. Domestic heating oil, calculated based on a smoothed 12-month moving average, has cost on average 3.4% more this month. Bread and cereals have become 1.3% more expensive. Prices for fruit have increased on average by 2.6%. Holiday villages have increased by 4.1% from the previous month.
Prices for products for pets decreased on average by 4.4%. Alcoholic beverages were on average 1.7% less expensive.
Inflation is now running at 2.75%, compared to 2.35% in September and 2.24% in August. Inflation based on the health index amounts to 2.29% this month compared to 1.91% in September and 1.77% in August. Inflation without energy has increased to 1.52% in October compared to 1.49% in September and 1.39% in August. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 1.40% in October, against 1.34% in September and 1.50% in August.
Food inflation is now running at 2.63%, compared to 2.44% last month and 1.55% in August. Fresh fruit now costs 9.1% more than in October 2017. Fresh vegetable prices are also on the rise: 3.7% on an annual basis. Fish and shellfish are 3.0% more expensive than in October 2017. Butter is 6.5% more expensive than last year. Prices have increased by 3.6% for non alcoholic beverages and by 2.6% for alcoholic beverages. Tobacco prices have gone up by 6.2% compared to October last year. Energy inflation is now running at 13.75%, up from 9.87% in September and 9.92% in August. Electricity is now 8.7% more expensive than a year ago. Natural gas is 18.6% more expensive than in October 2016. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have increased by 17.5% in a year. Motor fuels are 16.4% more expensive than last year. Inflation for services has gone down to 1.53% from 1.60%. Inflation for rents has slightly increased and now stands at 1.02%, compared to 1.00 % in September.
The following products and services have registered the sharpest price increases compared to last year in October:
|Domestic heating oil||17.5%|
|Liquefied petroleum gas (butane and propane)||15.9%|
|Other tobacco products (e.g. loose tobacco)||12.8%|
|Other meats (e.g. rabbit)||9.5%|
The following products and services have registered the sharpest price decreases compared to last year in October:
|Other information processing equipment (e.g. smart watch)||-4.0%|
|Frozen vegetables, excluding potatoes||-3.0%|
|Mobile telephone services||-2.5%|
|Fixed telephone equipment||-2.2%|
|Motor vehicle insurance||-2.0%|
|Cookers, hobs and ovens||-1.8%|
|Equipment for sound and pictures (e.g. HDMI, earphones,...)||-1.7%|
The main group with the largest upward effect on inflation in October was housing, water and energywith an effect on inflation of 0.62 percentage point. The largest downward effect was measured for the group "recreation and culture" (-0.18 percentage point).
The main group with the largest contribution to inflation is "housing, water and energy" with 1.01 percentage point. The lowest contribution to inflation was registered by the main group "education", with 0.01 percentage point.
|2013 = 100||July 2018||August 2018||September 2018||October 2018|
|Consumer price index||107.43||107.58||107.58||108.31|
|Smoothed health index*||104.94||105.10||105.23||105.54|
|* defined in the law of 23 April 2015 on the promotion of employment (Belgian Official Journal of 27 April 2015)|
Consumer price index, inflation, health index, health index (moving average), index without energy and petroleum, last 13 months
Consumer price index by base year, last 13 months
Annual inflation rate (in %) based on 12 groups (COICOP), last 11 months
Consumer price index based on 4 groups, last 13 months
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.