Inflation in Belgium fell to 2.86% in August, as food inflation has slowed almost to zero. The latest consumer price index (CPI) shows that annual inflation fell again in August, to 2.86%, from 3.64% in July and 3.74% in June.
The CPI measures inflation by tracking the changing prices of a "basket" of typical groceries and other consumer goods and services.
Food and energy
Food prices globally have soared in recent years, as the pandemic disrupted supply chains and the invasion of Ukraine by Russia triggered an energy crisis.
However, food inflation (which includes alcoholic beverages) came to just 0.04% in August, compared to 0.54% the previous month. Food inflation in Belgium has fallen substantially from a peak of 17.02% in March last year.
Meanwhile, energy inflation is also coming down, falling to 6.96% in August compared to 14.01% in July and 15.10% in June. Compared with last month, the price of natural gas has fallen by 1.6%, and electricity prices are down by 0.3%. Fuel prices were also 3.9% lower this month than in July.
Statbel, the Belgian statistics office, has explained that the high level of energy inflation in recent months is due to the wrapping up of government energy supports which were offered during the peak of the energy crisis. Statbel estimates that the disappearance of energy supports will continue to skew energy inflation until February 2025.
Underlying inflation, which excludes energy and unprocessed food prices, stood at 2.73% in August, compared with 3.04% in July and 2.97% in June.
Inflation in the cost of services fell from 4.21% in July to 4.04% in August, while rent inflation rose from 4.63% to 4.74%.
Biggest rises and falls
The biggest upward drivers of inflation in August were housing, water and energy costs, while the prices of food and non-alcoholic beverages had the biggest downward impact.
Among individual items, the main price rises in August were for tobacco (+5.4%), hotel rooms (+2.1%) and non-alcoholic drinks (+1.7%).
The biggest price drops were for household appliances (-6.3%), flowers and plants (-4.7%) and fuels (-3.9%).
The smoothed health index (a four-month average inflation tracker which is used as the basis for indexation of pensions, social security benefits and some salaries and wages) stood at 129.63 points in August. The next benchmark for the upward indexation of civil service and social benefits is set at 130.67 points.
An initial estimate according to the EU level Harmonised Index of Consumer Prices (HICP) puts inflation in Belgium at 4.5% in August.
