Consumer price index

Inflation decreases for the eighth month in a row and amounts to 0.39 %

Consumer prices
Inflation decreases for the eighth month in a row and amounts to 0.39 %

Consumer price index of November 2019

  • Inflation decreases from 0.48 % to 0.39 % in November.
  • The consumer price index this month increases by 0.07 point or 0.06 %.
  • Inflation based on the health index has declined from 0.67 % to 0.48 %.
  • The smoothed health index amounted to 106.73 points in November.
  • The most significant price increases in November were registered for travels abroad, alcoholic beverages and the purchase of vehicles. However, holiday villages, personal care products and airplane tickets have had a decreasing effect on the index.

The consumer price index is running at 108.90 points in November 2019. It has increased by 0.07 point over the month. Inflation has dropped from 0.48 % to 0.39 %. The health index has gained 0.02 point to 109.00 points. Inflation based on the health index has fallen to 0.48 % from 0.67 %. The most significant price increases in November were registered for travels abroad, alcoholic beverages and the purchase of vehicles. These increases were mainly offset by price decreases for holiday villages, personal care products and airplane tickets.

cpi

The consumer price index rose by 0.07 point or 0.06 % in November 2019 and now stands at 108.90 points, compared to 108.83 points in October 2019 (2013=100).

The health index has increased by 0.02 point to 109.00 points in November, compared to 108.98 points in October. The smoothed health index amounted to 106.73 points in November. The central index for public service and social benefits, set at 107.20 points, has therefore not been reached. The last time the central index was exceeded was in August 2018.

The largest upward pressure in November came from travels abroad, alcoholic beverages and the purchase of vehicles.

However, holiday villages, personal care products and airplane tickets provided the largest downward pressure compared to last month. The most important trends this month are:

Upward: Effect: Downward: Effect:
Travels abroad +0.085 point Holiday villages -0.040 point
Alcoholic beverages +0.035 point Personal care products -0.035 point
Purchase of vehicles +0.035 point Airplane tickets -0.030 point

Travels abroad have, after seasonal adjustment, become on average 4.8 % more expensive compared to last month. Prices for alcoholic beverages have increased on average by 2.1 % this month. The purchase of vehicles became on average 0.5 % more expensive.

After seasonal adjustment, stays in holiday villages cost on average 6.3 % less. Prices for personal care products have decreased on average by 2.7 %. Airplane tickets have become 2.4 % less expensive this month.

Inflation is now running at 0.39 %, compared to 0.48 % in October and 0.80 % in September. Inflation based on the health index amounted to 0.48 % this month compared to 0.67 % in October and 0.99 % in September. Inflation without energy decreased to 1.35 % in November, compared to 1.37 % in October and 1.25 % in September. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 1.46 % in November, against 1.55 % in October and 1.40 % in September.

Food inflation is now running at 0.24 %, compared to -0.06 % last month and 0.12 % in September. Fresh fruit now costs 2.1 % less than in November 2018. Fresh vegetables are cheaper: 4.0 % on an annual basis. Fish and shellfish are 0.1 % less expensive than a year ago. However, meat is 2.1% more expensive on an annual basis. On average, non-alcoholic beverages cost 0.5 % less than in November last year. Alcoholic beverages are 0.7 % more expensive than last year. Tobacco prices have gone up by 5.0 % compared to November last year.

Energy inflation is now running at -7.29 %, compared to -6.66 % last month and -2.93 % in September. Electricity is now 8.1 % less expensive than a year ago. Natural gas is 17.5 % less expensive than last year in November. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have decreased by 1.5 % in one year. Motor fuels are 4.0 % less expensive than last year. Inflation for services has declined to 2.08 % from 2.13 %. Inflation for rents remains unchanged compared to last month and stands at 1.18 %

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

Upward: Inflation:
Postal mail 12.5%
Frozen fish 12.1%
Newspapers 11.8%
Other tobacco products (e.g. loose tobacco) 9.8%
Frozen vegetables other than potatoes 9.7%
Software 7.7%
Educational text books 7.5%
Package holidays in Belgium 6.6%
Contribution to national health services 6.1%
Wine from other fruits (cider) 5.6%
Travel insurance 5.6%
Jewellery 5.5%

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

Downward: Inflation:
Natural gas -17.5%
Fresh shellfish -9.7%
Electricity -8.1%
Other fuels (LPG) -6.8%
Diesel -6.5%
Mobile telephone services -5.3%
Frozen shellfish -5.0%
Other recording media (memory card) -4.8%
Video equipment -4.7%
Washing machines, tumble dryers, dishwashers -4.4%
Fresh vegetables, excluding potatoes -4.0%
Mobile phones -3.6%

The main group with the largest upward effect[i] on inflation in November was “Recreation and culture” with an effect of 0.21 percentage point. The largest downward effect was measured for “Housing, water and energy” (-0.74 percentage point).

cpi

The main group with the largest contribution[ii] to inflation is “Recreation and culture” with 0.22 percentage point. The lowest contribution to inflation was registered by the main group “Housing, water and energy”, with -0.53 percentage point.

cpi

cpi

 

2013 = 100 August September October November
Consumer price index 108.94 108.44 108.83 108.90
Inflation 1.26% 0.80% 0.48% 0.39%
Health index 109.07 108.58 108.98 109.00
Smoothed health index* 106.83 106.76 106.75 106.73
* 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[iii]) for Belgium amounts to 0.36 % in November. The difference between the HICP and the national consumer price index (CPI) is mainly due to conceptual differences in terms of weight source, reference population, spending concept, seasonal adjustment and moving average (smoothing)[iv]


[i]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).

[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.

[iii]The flash estimate of the Belgian HICP is an estimate of the inflation according to the European harmonised index of consumer prices. It is calculated by Statbel based on incomplete data for the reference period and is published by Eurostat at the end of the month. A couple of weeks later, Statbel calculates, based on exhaustive data, the final HICP that will be published by Eurostat and Statbel.

[i]The main conceptual differences between the HICP and the CPI are

  • The weighting of the basket of goods and services in the HICP is mainly based on the national accounts. At lower detailed levels the Household Budget Survey is used. The CPI mostly uses the Household Budget Survey at all levels.
  • The reference population of the HICP consists of private households (including tourists in Belgium) and institutional households (e.g. retirement homes and nursing homes). In the CPI, this population consists of private households with a reference person under a maximum age.
  • The HICP uses the concept of domestic expenditure: expenditure in Belgium by the reference population. The CPI uses the concept of national expenditure: expenditure by the reference population irrespective of the location.
  • Seasonal adjustment is not applied in the HICP, but is applied in the CPI to travels abroad and stays in holiday villages.
  • Sales periods in the CPI are systematically spread over 6 months, but are included in the same month in the HICP.
  • Current prices for domestic heating oil are used in the HICP calculation. A weighted 12-month average is applied in the CPI calculation.
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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