• Belgium's inflation rate based on the European harmonised index of consumer prices (HICP) stood at 4.4% in February, just as in January and December.
• Core inflation (inflation without energy and unprocessed food) stood at 3.7% in February compared to 2.5% in January.
• The inflation rate based on the consumer price index (CPI) for February stood at 3.55% compared to 4.08% in January.
• The sub-indices with the largest upward effect on inflation were natural gas, tobacco, electricity, domestic services and package holidays.
• However, the sub-indices with the largest downward effect on inflation were motor fuels, domestic heating oil, clothing, telecommunication, furniture and meat.
• The harmonised index of consumer prices of February for the EU Member States will be published by Eurostat on 19 March.

The inflation rate based on the European harmonised index of consumer prices (HICP)^[1] stood at 4.4% in February, just as in January and December. The inflation rate based on the harmonised index of consumer prices at constant tax rates (HICP-CT)^[2] was 3.6% in February, compared to 3.5% in January and 3.6% in December. The difference in inflation between the HICP and the HICP-CT is largely due to the increase in excise duties on tobacco. Indeed, these modifications to taxation are not taken into account in the HICP-CT.

Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 3.7% in February, compared to 2.5% in January and 3.5% in December. Inflation without energy rises to 3.6% in February, compared to 2.5% in January.

Inflation for food products and non-alcoholic beverages amounts to 2.4% this month, just as in the previous month. Inflation for oils amounts to 7.8% this month compared to 7.6% in January. For dairy products, inflation rises to 2.9% from 2.4% last month. Fish registers this month an inflation rate of 2.2% compared to 2.7% in January. Bread and cereals register in February an inflation rate of 2.2%, or an increase compared to the rate of 2.0% observed in January. Inflation for meat has stabilised at 2.1% this month, as in January.

The contribution of energy to inflation has been negative from January 2023 to February 2024. It is now 1.2%, which is a decrease compared to last month (2.2%). Food products provide a contribution of 0.4%.

Electricity is now 19.5% more expensive than a year ago. Natural gas registers an inflation rate of 37.1% compared to February last year. Domestic heating oil prices have gone down by 9.9% compared to last year.

Inflation and effect on inflation for the 12 main groups

Based on the breakdown into 12 main groups, the highest inflation rate in February was measured for “Alcoholic beverages and tobacco” (17.9%). The lowest inflation rate was measured for “Communication” (-0.9%). The main group with the largest upward effect on inflation in February was “Housing, water and energy” with an effect of 1.2 percentage points. The largest downward effects were measured for “Food and non-alcoholic beverages” and “Transport” (-0.4 percentage points each).

Inflation^[3] and effect^[4] 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 decreased compared to the previous month. In February, it amounted to 12.1% compared to 22.8% in January and 13.7% in December. Prices increased by 1.4% on average compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 15.7%.
• Inflation for processed food products stood at 7.2% in February, compared to 7.5% in January and 6.9% in December. Prices have decreased by 0.1% on average compared to the previous month. The average inflation rate for the last twelve months is 5.9%.
• Inflation for unprocessed food (fruit, vegetables, meat and fish) amounts to 1.6% in February compared to 1.7% in January and 1.5% in December. Prices increased by 0.4% on average compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 1.9%.
• Inflation for non-energy industrial goods stood at 0.7% in February, compared to -3.3% in January and 0.8% in December. Prices increased by 8.1% on average compared to the previous month. The average inflation rate of this aggregate for the last twelve months is 0.9%.
• Inflation for services (including rents) has increased to 4.2% in February compared to 4.1% in January and 3.7% in December. The average inflation rate of this aggregate for the last twelve months is 4.2%.

Core inflation (inflation without energy and unprocessed food) stood at 3.7% in February. This is an increase compared to the 2.5% rate registered in January. Average core inflation over the last 12 months amounts to 3.5%. Prices of this subaggregate have increased by 2.7% on average 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 natural gas and tobacco (0.75 percentage points). Electricity provided an effect of 0.51 percentage points. Domestic services had an impact of 0.13 percentage points. Finally, package holidays had an impact of 0.11 percentage points.

Sub-indices with the largest upward effect on inflation

The largest downward effect on inflation came from motor fuels (-0.26 percentage points). Domestic heating oil had a negative effect of -0.22 percentage points. Clothing had a negative effect of -0.21 percentage points. Telecommunication had an effect of -0.14 percentage points. Furniture had a negative effect of -0.12 percentage points. Finally, meat had a negative effect of -0.11 percentage points.

Sub-indices with the largest downward effect on inflation

Comparison with neighbouring countries

Since the final HICP of the neighbouring countries will not be published until later, comparisons can only be made based on the first HICP flash estimate of February. In Belgium, this inflation was 4.4% in February: it remains stable compared to the rate observed in January. The Netherlands registered an inflation rate of 3.5% in February; an increase compared to a rate of 3.0% in January. In February inflation in France decreased to 0.9%, compared to 1.8% in January. The first HICP flash estimate for February in Germany was 2.8% and remained stable compared to January.

Since Eurostat has not yet published the harmonised index of consumer prices at constant tax rates of February, January is the most recent month to use as a basis for comparison. Belgium's inflation rate based on the HICP-CT stood at 3.5% in January, slightly down from a rate of 3.6% in December. In Germany, this inflation rate increased to 2.5% in January compared to 2.3% in December. That inflation in France slightly increased to 1.5% in January from 1.4% in December. In the Netherlands, inflation decreased to 2.4% from 3.0% in December.

^[1] 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 have been neutralised in the CPI , 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.

^[2] 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.

^[3] 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.

^[4] The 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).