01/15/2025 | Press release | Distributed by Public on 01/15/2025 05:01
The inflation rate based on the European harmonised index of consumer prices (HICP)[1] decreased to 4.4% in December compared to 4.8% in November and 4.5% in October. The inflation rate based on the harmonised index of consumer prices at constant tax rates (HICP-CT)[2] was 3.6% in December, compared to 3.8% in November and 3.5% in October. The difference in inflation between the HICP and the HICP-CT is largely due to higher excise duty on tobacco and natural gas. Indeed, these modifications to taxation are not taken into account in the HICP-CT.
Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stood at 3.5% in December, compared to 3.8% in November and 3.7% in October. Inflation without energy decreased to 3.4% in December compared to 3.7% in November.
Inflation for food products and non-alcoholic beverages amounts to 1.7% this month versus 2.0% the previous month. Inflation for oils amounts to 7.6% this month compared to 7.7% in November. For dairy products, inflation is now 0.7% versus 0.3% last month. Fish registers this month an inflation rate of 1.7% compared to 1.0% in November. Bread and cereals register in December an inflation rate of 1.7%, or a slight decrease compared to the rate of 1.8% observed in November. Inflation for meat amounts to 1.3% this month compared to 2.1% last month.
The contribution of energy to inflation has been negative from January 2023 to February 2024. It is now 1.4%, which is a slight decrease compared to last month (1.5%). As described below, energy inflation decreases. This is not an increase in energy cost, but a consequence of the extinction of the 12-month impact of the basic packages in the index. Food products provide a contribution of 0.3%.
Electricity is now 12.6% more expensive than a year ago. Natural gas is 59.2% more expensive than in December last year. Domestic heating oil prices have gone down by 8.0% compared to last year.
Based on the breakdown into 12 main groups, the highest inflation rate in December was measured for "Alcoholic beverages and tobacco" (19.0%). The lowest inflation rate was measured for "Interior decoration and household appliances" (-0.2%). The main group with the largest upward effect on inflation in December was "Housing, water and energy" with an effect of 1.4 percentage points. The largest downward effect was measured for "Food and non-alcoholic beverages" (-0.5 percentage points).
Product group | Weight (‰) | Inflation on annual basis (%) | Effect on inflation (percentage point) | ||||||
HICP | HICP-CT | ||||||||
Oct/24 | Nov/24 | Dec/24 | Dec/24 | Oct/24 | Nov/24 | Dec/24 | |||
0 | Total expenditure | 1.000 | 4.5 | 4.8 | 4.4 | 3.8 | |||
1 | Food and non-alcoholic beverages | 157.3 | 2.4 | 2.0 | 1.7 | 2.0 | -0.4 | -0.5 | -0.5 |
2 | Alcoholic beverages and tobacco | 49.0 | 19.6 | 18.9 | 19.0 | 1.5 | 0.8 | 0.7 | 0.8 |
3 | Clothing and footwear | 54.3 | 2.3 | 6.2 | 3.4 | 6.2 | -0.1 | 0.1 | -0.1 |
4 | Housing, water and energy | 164.5 | 12.3 | 13.4 | 11.3 | 12.7 | 1.5 | 1.6 | 1.4 |
5 | Interior decoration and household appliances | 74.4 | 1.2 | 0.2 | -0.2 | 0.2 | -0.3 | -0.4 | -0.4 |
6 | Health | 85.4 | 2.1 | 2.1 | 2.0 | 2.1 | -0.2 | -0.2 | -0.2 |
7 | Transport | 108.9 | -1.1 | -0.4 | 1.1 | -0.5 | -0.7 | -0.7 | -0.4 |
8 | Communication | 32.2 | 2.1 | 2.3 | 2.1 | 2.3 | -0.1 | -0.1 | -0.1 |
9 | Recreation and culture | 87.1 | 2.4 | 1.3 | 1.5 | 1.3 | -0.2 | -0.3 | -0.3 |
10 | Education | 5.1 | 1.6 | 1.6 | 1.6 | 1.6 | 0.0 | 0.0 | 0.0 |
11 | Hotels, cafés and restaurants | 93.1 | 4.0 | 4.6 | 4.3 | 4.6 | -0.1 | 0.0 | 0.0 |
12 | Various goods and services | 88.7 | 3.3 | 3.3 | 3.3 | 3.3 | -0.1 | -0.1 | -0.1 |
The overall HICP can be broken down into five specific aggregates which together form the total expenditure.
Core inflation (inflation without energy and unprocessed food) stood at 3.5% in December. This is a decrease compared to the 3.8% rate registered in November. Average core inflation over the last 12 months amounts to 3.8%. Prices of this subaggregate have decreased by 0.5% on average compared to the previous month.
Specific aggregates | Weight (‰) | Inflation on annual basis (%) | 12-month average (%) | Monthly change | ||
Oct/24 | Nov/24 | Dec/24 | Dec/24 | Dec/24 | ||
Total expenditure | 1.000,0 | 4.5 | 4.8 | 4.4 | 4.3 | 0.7 |
Fuels and energy sources | 100,8 | 11.9 | 14.8 | 13.7 | 11.0 | 3.1 |
Processed food products | 164,8 | 7.4 | 6.9 | 6.9 | 5.6 | 0.1 |
Unprocessed food | 41,4 | 3.1 | 2.2 | 1.5 | 2.6 | -0.6 |
Non-energy industrial goods | 256,0 | 1.1 | 1.7 | 0.8 | 1.7 | 0.0 |
Services | 436,9 | 3.9 | 3.8 | 3.7 | 4.3 | 1.0 |
HICP without energy and unprocessed food (core inflation) | 857,7 | 3.7 | 3.8 | 3.5 | 3.8 | 0.5 |
The largest upward effect on inflation was caused by naturalgas (1.10 percentage points). Tobacco had an impact of 0.78 percentage points. Finally, electricity had an effect of 0.30 percentage points.
Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
2024 | Dec/24 | ||
04.5.2 | Natural gas | 20.2 | 1.10 |
02.2.0 | Tobacco | 32.4 | 0.78 |
04.5.1 | Electricity | 34.9 | 0.30 |
The largest downward effect on inflation came from motor fuels (-0.24 percentage points). Domestic heating oil provided a negative effect of -0.17 percentage points. Major domestic appliances and meat each have a negative impact of -0.13 percentage points. Finally, furniture provided a downward effect of -0.12 percentage points.
Sub-index | Weight (‰) | Effect on inflation (percentage point) | |
2024 | Dec/24 | ||
07.2.2 | Motor fuels | 30.9 | -0.24 |
04.5.3 | Domestic heating oil | 13.7 | -0.17 |
05.3.1 | Major domestic appliances | 9.4 | -0.13 |
01.1.2 | Meat | 41.1 | -0.13 |
05.1.1 | Furniture | 24.9 | -0.12 |
Since the finalHICP of the neighbouring countries will not be published until later, comparisons can only be made based on the first HICP flash estimate for December. This inflation in Belgium in December amounted to 4.4%, a decrease compared to the rate of 4.8% observed in November. The Netherlands registered an inflation rate of 3.9% in December; an increase compared to an inflation rate of 3.8% in November. Inflation in France slightly increased from 1.7% in November to 1.8% in December. The first HICP flash estimate for December in Germany was 2.8%, an increase compared to November (2.4%).
Since the HICP at constant tax rates for December are not yet published by Eurostat, November is the most recent month to use as a basis for comparison. Belgium's inflation rate based on the HICP-CT stood at 3.8% in November, slightly up from a rate of 3.5% in October. In Germany, this inflation has stabilised at 1.8% in November and October. That inflation in France slightly increased from 1.2% in October to 1.3% in November. In the Netherlands, inflation increased to 2.8% in November from 2.3% in October.
[1] In addition to the national consumer price index (CPI), Statbel also calculates a European harmonised consumer price index (Harmonised Index of Consumer Prices, HICP). The HICP is used to compare inflation rates in the EU Member States. To this end, the applied expenditure approach and methods have been coordinated as much as possible and laid down in European regulations. The results of the CPI and HICP are not the same. This is mainly due to a different weighting and composition of the basket of goods and services on which these indices are based.
The HICP is also used by the European Central Bank in its monetary policy. Additionally, the HICP is used to determine to what extent a Member State meets the inflation criteria set in the Treaty on European Union.
Differences between the HICP and the current CPI are:
[2] The HICP-CT is calculated in the same way as the regular HICP, but the prices in this index are calculated based on constant tax rates. This index therefore reflects the theoretically potential effect of changes in indirect tax rates (such as VAT or excise duties) on measured inflation. However, this is a theoretical effect, since it presupposes that tax changes are immediately and entirely reflected in prices paid by consumers.
[3] Inflation on annual basis measures the price changes between the current month and the same month of the year before. A 12-month average compares the average HICP of the last 12 months with the average of the previous 12 months. A monthly change compares the price levels of the last two months.
[4] The effect on inflation shows the changes on the inflation rate by including the sub-index in the HICP. The effect not only takes the weight of the sub-index into account, but it also takes into account whether the sub-index inflation is higher or lower than that of the total expenditure (overall HICP).