Total inflation in the second quarter of 2023, measured on the basis of the Harmonised Index of Consumer Prices (HICP), averaged 2.6% in Belgium, a report by the Economic Affairs Department’s Price Observatory showed on Tuesday.
This is the lowest level registered since the start of tensions between Ukraine and Russia and it is comparable to the rate observed in the 2nd quarter of 2021.
On the other hand, prices of food products, services and industrial goods continue to rise, compared with 2022.
According to the Economic Affairs Department, the main reason for the slowdown in overall inflation in recent months is the significant fall in energy prices. This is true, in particular, for gas and electricity, and to a lesser extent for liquid fuels and motor fuels.
After rising sharply in 2022 (+57.9% on average) due to the Russian-Ukrainian conflict, these prices started plummeting in early 2023 to reach a year-on-year fall of 32% in the second quarter.
“Wholesale prices on energy commodity markets fell as a result of, among other things, lower demand resulting from mild weather conditions and extensive energy-saving efforts, and the slowdown in the Chinese economy,” the report reads.
For all other product groups, inflation continued to rise in Q1 2023. But price growth then slowed in Q2 for food products (due to lower prices on international markets and lower price rises at sector level) and industrial goods (fewer supply problems and lower raw material prices), reaching 14.2% and 6.5% respectively.
As for services, inflation continued to rise, reaching 6.5% in Q2 2023 due among other things to automatic wage indexation.
In the main neighbouring countries (Germany, France and the Netherlands), total inflation also rose sharply from mid-2021, reaching a peak in Q4 2022. As in Belgium, inflation fell from the first quarter of 2023, reaching 6.9% in Germany and 6.3% in the Netherlands in the second quarter. These are higher levels than in Belgium.
