In March, the consumer price index climbed to over 8.3%. Inflation which reached its highest level since March 1983, during which it amounted to 8.92%. Which means that life is therefore much more expensive than last year, at this time. This is not new, we have been breaking records for months, but what is surprising is that in our French neighbors for example, it has peaked at 4.5%. So why is Belgium slipping?
Energy at the heart of the problem
To calculate this price index, we take into account thousands of products that make up the “consumer’s basket”, divided into twelve categories. Three of them stand out and represent more than half of the index. These are food, housing (including energy) and transport. However, all are impacted by energy costs.
Agreed, but the prices of gas or oil are fixed on the international markets and their variations are reflected in all the countries, you will say. Certainly, but not in the same way since the States are free to set taxes and excise duties, which strongly influence the final invoice. Gas station attendants in the Grand Duchy of Luxembourg are well aware of this.
Moreover, the energy mix differs from one country to another. Germany still depends heavily on coal, while France has opted for nuclear power to produce electricity, which also often supplies residential heating.
But according to Xavier Timmermans, economist at BNP Paribas Fortis, “the problem in Belgium is that the market reacts much faster than in our neighbours. In question: the importance of the price of the raw material for gas and the high number of variable contracts in general. Thus, when in a few months the Belgian consumer has seen his gas bill increase by 125%, the German has only suffered a 40% increase. For electricity, this increase was 35% for Belgian households between June and last December, whereas it was barely 2% in France.“
To this must be added the very structure of the Belgian economy, which is more sensitive to price fluctuations because we have many energy-intensive companies. And the economist adds that the size of our country does not promote competition between energy suppliers either, as is the case with our neighbours.