Inflation in Belgium cooled slightly to 3.64% in July, although the holiday season drove the prices of flights up by almost 40%, with the cost of hotels, holiday villages and campsites also spiking.
The latest consumer price index published by national statistical office Statbel shows that prices for goods and services rose by 3.64% in July, compared to the same month last year. This is slightly lower than an inflation rate of 3.74% in June, but still higher than 3.36% seen in May.
Some of the biggest price increases in July were driven by the summer holiday season, with airline ticket prices increasing by 39.7% on average, and hotel room prices rising by an average of 9.1%. Holiday villages and campsites cost an average of 6.8% more than the previous month, while package holidays were 6.5% more expensive, and restaurant and café prices increased by an average of 0.5%.
Apart from holiday-related spending, the cost of natural gas rose by 2.6% in July, while tobacco prices rose by 4.3% and fuel prices increased by 0.8%.
In contrast, trips abroad and city trips had a downward effect on the index, costing around 0.8% less than in June.
Energy inflation persists
Energy inflation remains high for Belgian consumers, standing at 14.01% in July, compared to 15.10% in June and 11.17% in May. Statbel has repeatedly noted that current energy inflation is somewhat artificial, as it is skewed by the winding down of energy supports offered by the Belgian government.
However, the cost of natural gas is still 2.6% higher in July than last month, while electricity prices are 0.7% higher. Fuels cost 0.9% more in July than in June.
The inflation rate excluding energy products stood at 2.69% in July, compared to 2.68% in June and 2.64% in May. Core inflation, which excludes energy products and unprocessed food products, stood at 3.04% in July, compared to 2.97% in June and 2.80% in May.
The Belgian statistics office said that prices in the "housing, water and energy" group were the biggest drivers of inflation in July, while the "food and non-alcoholic beverages" had the largest negative impact on the headline figure.
Inflation below indexation threshold
The smoothed health index (a four-month average which is used as the basis for indexation of pensions, social security benefits and some salaries and wages) stood at 129.12 points in July. This is below the next pivotal index to trigger an increase in civil service pay and social benefits in Belgium, which is set at 130.67 points.
Based on the health index, inflation this month stood at 3.60%, compared to 3.80% in June and 3.20% in May.
