Inflation amounts to 8.05%
Consumer price index for January 2023
- Inflation decreased from 10.35% to 8.05% in January.
- The consumer price index increased by 0.12 points or 0.09% this month.
- Inflation based on the health index has fallen from 10.63% to 8.28%.
- The smoothed health index amounted to 125.26 points in January.
- Inflation for food products has sharply increased in recent months. Food inflation (including alcoholic beverages) now stands at 15.59%. The contribution of food products to inflation currently amounts to 2.95 percentage points.
- Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 8.05% in January, compared to 7.34% in December. This is due to the increase in inflation for processed food products and services.
- The most significant price increases in January were registered for bread and cereals, dairy products, health insurances, meat, non-alcoholic beverages, fire insurances, nursing care, personal care, bundled telecommunication services and fruit. However, natural gas and electricity have had a decreasing effect on the index.
Inflation amounts to 8.05% in January compared to 10.35% in December and 10.63% in November. Inflation based on the health index amounted to 8.28% this month compared to 10.63% in December and November. Inflation without energy increased to 8.61%, compared to 7.89% in December and 7.80% in November. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 8.05% in January, compared to 7.34% in December and 7.16% in November.
Comment on inflation
With regard to energy, we see a new decrease in inflation this month. It now stands at 5.21%, compared to 32.88% last month. This is due to the sharp increase in energy inflation observed in January 2022 (inflation being a measure related to the previous year) and a decrease in electricity and natural gas prices compared to last month. For electricity, inflation currently stands at 2.8% compared to 35.5% last month. For natural gas, it went from 73.1% last month to -7.1% this month. Compared to last month, natural gas prices decreased by 27.7% and those for electricity by 8.6%. Prices for domestic heating oil, calculated based on a smoothed 12-month moving average, have increased by 46.7% in a year. Motor fuels cost 2.8% more than in January last year and increased by 0.7% this month compared to the previous month.
Inflation for services has increased to 6.56% up from 5.80%. Inflation for rents has risen from 4.98% to 5.93%. Food inflation (including alcoholic beverages) now stands at 15.59% compared to 14.53% last month. This inflation has increased sharply in recent months. In January last year, it was still 2.26%.
In particular, inflation for oils, fish, dairy products, bread and cereals and meat has sharply increased in recent months. Inflation for oils stands this month at 28.2%. In January 2022, it was still 6.8%. For fish, inflation is now 15.0% compared to 1.6% in January 2022. Inflation for dairy products amounts to 24.6% this month compared to 2.4% in January 2022. For bread and cereals, inflation stands at 18.3% this month compared to 4.5% in January last year. Inflation for meat amounts to 13.8% this month compared to 1.9% in January 2022.
The decrease in inflation is associated with lower energy prices. Energy inflation goes from 32.88% in December 2022 to 5.21% in January 2023 and accounts for 0.42 percentage points to total inflation, compared to 3.25 the previous month. With an inflation of 15.59%, food products account for 2.95 percentage points.
The price of natural gas has decreased by 27.7% on average compared to the previous month. The price of electricity has decreased by 8.6% on average this month.
Some products and services that rose sharply in price compared to January last year are:
|Domestic heating oil||46.7%|
|Wood and other solid fuels||45.6%|
|Other edible oils than olive oil (e.g. frying oil)||37.0%|
|Margarine and vegetable fats||31.1%|
|Skimmed and semi-skimmed milk||27.6%|
Some products and services that fell sharply in price compared to January last year are:
|Other fuels (LPG)||-7.6%|
|Other information processing equipment (e.g. smartwatch)||-4.0%|
|Motor vehicle insurance||-2.7%|
The main group with the largest upward effect [i] on inflation in January was “Food and non-alcoholic beverages” with an effect of 1.73 percentage points. The largest downward effect was measured for “Housing, water and energy”with -0.67 percentage points.
The main group with the largest contribution [ii] to inflation is “Food and non-alcoholic beverages” with 2.83 percentage points. The lowest contribution to inflation was registered by the main group “Education”, with 0.01 percentage points.
Comment on the level of the indices
The consumer price index increased by 0.12 points or 0.09% in January 2023 and now stands at 127.84 points, compared to 127.72 points in December 2022 (2013=100). The health index has increased by 0.11 points to 128.00 points in January, compared to 127.89 points in December. The smoothed health index amounted to 125.26 points in January. The next central index for public service and social benefits is set at 125.60 points.
The most significant price increases in January were registered for bread and cereals, dairy products, health insurances, meat, non-alcoholic beverages, fire insurances, nursing care, personal care, bundled telecommunication services and fruit. However, natural gas and electricity have had a decreasing effect on the index.
The most important trends this month are:
|Bread and cereals||+0.255 points||Natural gas||-1.145 points|
|Milk, cheese and eggs||+0.120 points||Electricity||-0.515 points|
|Health insurance||+0.115 points||-|
|Non-alcoholic beverages||+0.100 points|
|Fire insurance||+0.095 points|
|Nursing care||+0.090 points|
|Personal care||+0.090 points|
|Bundled telecom services||+0.080 points|
Prices for bread and cereals increased by 6.7% on average this month. The price of dairy products soared in January by 4.3% on average. Health insurances were on average 7.5% more expensive this month. Meat has increased by 2.2% on average. Non-alcoholic beverages were on average 4.6% more expensive in January. Fire insurances experienced a price increase of 5.2% on average. Nursing care increased by 7.0% and personal care by 2.6% on average. Prices for bundled telecommunication services increased by 2.6% on average and fruit cost 4.9% more in January.
Prices for natural gas and electricity decreased by 27.7% and 8.6% respectively this month.
|2013 = 100||October||November||December||January|
|Consumer price index||128.21||127.92||127.72||127.84|
|Smoothed health index*||122.22||123.47||124.50||125.26|
|* 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 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.
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 health index, also called smoothed index (the average value of the health indexes of the last 4 months) is used as a basis for the indexation of retirement pensions, social security benefits and some salaries and wages. Public wages and social benefits are indexed as soon as the smoothed index reaches a given value, called the central index. The smoothed index is also called moving average.
In order to perform a 2% index jump (laid down in the Law of 23 April 2015 on employment promotion), the smoothed health index has been temporarily blocked at its value of March 2015 (100.66). The smoothed health index was then reduced by 2% from April 2015. When the reduced smoothed health index (also called the reference index) had increased again by 2% or in other words when it had exceeded the value of 100.66, the index was no longer blocked. It occurred in April 2016.
Since April 2016 the smoothed health index is calculated in the same manner as the reference index and therefore corresponds to the arithmetical mean of the health indexes of the last 4 months multiplied by a factor of 0.98.
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: https://bosa.belgium.be/nl/themas/werken-bij-de-overheid/verloning-en-voordelen/loonwedde/indexatie/indexatie-algemene
And : https://bosa.belgium.be/fr/themes/travailler-dans-la-fonction-publique/remuneration-et-avantages/traitement/indexation-0
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