The Federal Planning Bureau has released its latest forecast for inflation in Belgium. The new forecast revises down the prediction for inflation in 2023 to 4.2%. Last month the Federal Bureau of Planning forecast an inflation rate of 4.5% for 2023. For 2024 the Bureau forecasts a further fall in the rate of inflation to 3%. This is slightly higher than the 2.9% forecast in last month’s projections.
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Federal Planning Bureau revises down its inflation forecast
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This is all a far cry from 9.59% inflation rate in 2022. Nevertheless, both the forecast for this year and for 2024 are well above the ECB’s long-standing goal of 2% inflation in all the countries of the Eurozone.
The latest inflation forecasts are based on the premise of oil costing and average of 82 US dollar per barrel in 2024 and 78 US dollar per barrel in 2024. The Federal Planning Bureau predicts an exchange rate of 1.07 US dollar per euro during this year and 1.08 US dollar per euro in 2024.
Trigger index
With the inflation forecast having been revised down, the date at which the Federal Planning Bureau expects the so-called trigger index, whereby pensions benefits and a month later public sector wage increase by 2% to match inflation has also been put back by a month.
The trigger index is now expected to be exceeded for the next time in September. This means that pensions and benefits will increase by 2% in October and public sector wages in November.
The last time the trigger index was exceeded was in November of last year.