Inflation, the figure that reflects the general rise in price levels, has risen further to 4.69 per cent. This rise is largely due to high energy and fuel prices linked to the ongoing war in the Middle East.
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Inflation rises to 4.69 per cent as high fuel prices take their toll
Colin Clapson
Published:
From 1.1 per cent in January, via 3.4 per cent in June, to 4.69 per cent in September: inflation continues to rise sharply. The main culprit is the high cost of energy. Energy inflation stood at no less than 24.37 per cent in September (compared with 10.59 per cent in July).
The main factor here is natural gas, the price of which has risen by more than a third year-on-year. The price of heating oil is a fifth higher than a year ago. Compared with a month ago, natural gas has become 6.9 per cent more expensive and electricity 4.2 per cent.
Motor fuels have also become a third more expensive compared with September last year. Diesel has been hit hardest: that fuel now costs 44.1 per cent more than a year ago. For petrol, the increase is 29.1 per cent, and for LPG, 21.2 per cent.
Food slightly cheaper
High energy costs lead to high production costs and may therefore have an impact on food prices in the long term, but this is not yet reflected in the figures. What’s more, food inflation actually fell very slightly in September.
The following items have become cheaper compared to last year: fresh berries, as well as other fruit and vegetables, plant-based milk and cereals. The price of video and audio equipment (televisions, speakers, etc.), power banks and stationery have also fallen.
Loss of purchasing power
Stijn Baert, professor of economics at Ghent University and member of the index committee, warns against a loss in spending power. The index committee includes representatives from both sides of industry. It is where wages and working conditions are discussed as well as the automatic indexation or top-up of Belgian wages and benefits to keep them in line with inflation. Baert argues that whilst wages and benefits are adjusted for inflation, they are not adjusted for the full rise in the cost of living.
“Our wages follow the health index, which excludes unhealthy products such as alcohol, tobacco, petrol and diesel. Health index inflation stands at ‘only’ 4 per cent.”
“If this continues, wages will be adjusted by less than the increase in the cost of living for an average family. So, we will actually lose spending power.”