LUXEMBOURG – Luxembourg had not experienced such high inflation since 1984 (+7%!). Energy, services, food, travel, prices rose once more in April.
Food prices continue to rise.
Editpress
7% inflation over one year, unheard of since 1984! Like many European countries, Luxembourg is experiencing a recent unprecedented price increase, in a post-pandemic context and the return of war on the European continent. According to the latest data provided by Statec, the consumer price index increased by another 0.8% in April.
Unsurprisingly, the rise in energy prices contributed to this (+5.5% for heating oil), even if the increase in oil prices generally turned out to be less spectacular than in previous months (+1.1 %). The comparison with the previous year, on the other hand, illustrates this dynamic: +59% increase over one year!
Airline ticket prices are skyrocketing
In addition to oil prices, inflation in Luxembourg is mainly due to the rise in service prices (+1%). A phenomenon that largely results from… the last index tranche. “Inflation excluding petroleum products is largely due to the surge in service prices, under the effect of wage indexation on April 1,” writes Statec. Count 2% increase for the prices of retirement homes, +1.2% in the catering sector or 2.4% for home insurance.
Same upward momentum for food prices: +2.4% for meat and 3.7% for fresh vegetables. We should also note an increase in the price of plane tickets, which soared to +31.4%. A usual development at this time of year marked by the Easter holidays.
All these increases should have led to the triggering of a new index tranche in June and another in 2023. Following the tripartite and the adoption of the “Solidaritéitspak”, the government however decided to postpone the increase by 2, 5% of salaries, wages and pensions to April 2023 and April 2024, in exchange for compensation.
Government and social partners have reached an agreement for the postponement of two index tranches.
Whether this record inflation will continue remains to be seen. Statec is not particularly optimistic on the issue, following “the outbreak of war in Ukraine and containment measures in China”.
We must therefore expect an increase in the cost of raw materials and a disruption of supply chains. The National Institute of Statistics predicts inflation at 5.8% for the whole of 2022 and 2.8% for 2023.