• Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) was running at 1.7 % in May compared to 2.0 % in April. Core inflation (inflation without energy and unprocessed food) stands at 1.5 % in May.
• The inflation rate based on the consumer price index (CPI) for May stood at 1.9 % compared to 2.1 % in April.
• The sub-indices with the largest upward effect on inflation were electricity, motor fuels and tobacco.
• Most of the downward pressure on inflation came from clothing and telecommunication.
• The harmonised index of consumer prices of May for the EU Member States will be published by Eurostat on 18 June.

The inflation rate based on the European harmonised index of consumer prices (HICP)^[i] was running at 1.7 % in May, against 2.0 % in April. Inflation based on the harmonised index of consumer prices at constant tax rates (HICP-CT)^[ii] was running at 1.6 % in May, down from 1.9 % in April. The difference in inflation between the HICP and the HICP-CT is largely due to the changes in excise duties on motor fuels and tobacco. These increases are not taken into account in the HICP-CT.

Inflation and effect on inflation for the 12 main groups

Based on the breakdown into 12 main groups, the highest inflation rate in May was measured for "Alcoholic beverages and tobacco" (3.0 %). The lowest inflation rate was measured for “clothing and footwear” and “communication” (both 0.2 %).

The main group with the largest upward effect on inflation in May was "Transport" with an effect of 0.2 percentage point. The largest downward effect was measured for "food and non-alcoholic beverages" (-0.2 percentage point).

Inflation^[iii] and effect^[iiii] on inflation for the overall HICP and 12 main groups

Inflation according to specific aggregates

The overall HICP can be broken down into five specific aggregates which together form the total expenditure.

• The inflation rate for fuels and energy sources has gone down. It was running at 3.7 % in May compared to 5.5 % in April. Prices increased on average by 1.0 % compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 9.9 %.
• Inflation for processed food products stood at 1.5 % in May, compared to 1.6 % in April and 1.7 % in March. On average, prices remained stable compared to April.
• Inflation for unprocessed food (fruit, vegetables, meat and fish) amounts to -0.1 % in May compared to
  -1.0 % in April and 0.2 % in March. Prices decreased on average by 0.4 % compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 1.4 %.
• Inflation for non-energy industrial goods was running at 1.0 % in May, compared to 1.1 % in April and 1.0 % in March. Prices increased on average by 0.2 % compared to the previous month.
• Inflation for services was running at 1.8 % in May, down from 2.2 % in April. Prices decreased by 0.2 % on average compared to the previous month.  

Core inflation (inflation without energy and unprocessed food) was running at 1.5 % in May, a decrease compared to 1.7 % in April. Average core inflation over the last 12 months amounts to 1.6 %. On average, prices of this subaggregate remained stable compared to the previous month.

Inflation according to specific aggregates

Effect of sub-indices on inflation

The largest upward effect on inflation was caused by electricity (0.13 percentage point). Motor fuels provided an effect of 0.11 percentage point. Finally, tobacco provided a contribution of 0.10 percentage point.

Sub-indices with the largest upward effect on inflation

The largest downward effect on inflation came from clothing and telecommunication, with -0.06 percentage point each. Fish and shellfish provided an effect of -0.05 percentage point.

Sub-indices with the largest downward effect on inflation

Comparison with neighbouring countries

Since the HICP of the neighbouring countries will not be published until later, comparisons can only be made for the month of April.

In April, inflation in Belgium was running at 2.0 %, down from the 2.2 % registered in March. The Netherlands registered an inflation rate of 3.0 % in April; a slight increase compared to an inflation rate of 2.9 % in March. Inflation in France in April amounted to 1.5 %, up from 1.3 % in March. Inflation in Germany was running at 2.1 % in April, up from 1.4 % in March.

Belgium's inflation rate based on the HICP-CT stood at 1.9 % in April, down from a rate of 2.0 % in March. In Germany, this inflation amounted to 2.1 %, just like the regular HICP inflation. In France, this inflation rate increased to 1,4 % in April compared to 1,2 % in March. In the Netherlands, it was running at 1.7 % in April, up from 1.4 % in March.

^[i] In addition to the national consumer price index (CPI), Statbel also calculates a European harmonised consumer price index (Harmonised Index of Consumer Prices, HICP). The HICP is used to compare inflation rates in the EU Member States. To this end, the applied expenditure approach and methods have been coordinated as much as possible and laid down in European regulations. The results of the CPI and HICP are not the same. This is mainly due to a different weighting and composition of the basket of goods and services on which these indices are based.

The HICP is also used by the European Central Bank in its monetary policy. Additionally, the HICP is used to determine to what extent a Member State meets the inflation criteria set in the Treaty on European Union.

Differences between the HICP and the current 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 currently 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.

^[ii] The HICP-CT is calculated in the same way as the regular HICP, but the prices in this index are calculated based on constant tax rates. This index therefore reflects the theoretically potential effect of changes in indirect tax rates (such as VAT or excise duties) on measured inflation. However, this is a theoretical effect, since it presupposes that tax changes are immediately and entirely reflected in prices paid by consumers.

^[iii] Inflation on annual basis measures the price changes between the current month and the same month of the year before. A 12-month average compares the average HICP of the last 12 months with the average of the previous 12 months. A monthly change compares the price levels of the last two months.

^[iv] An effect on inflation shows the changes on the inflation rate by including the sub-index in the HICP. The effect not only takes the weight of the sub-index into account, but it also takes into account whether the sub-index inflation is higher or lower than that of the total expenditure (overall HICP).