Skyrocketing energy, food and services prices continued to push up the inflation rate in Belgium, which reached record levels in July, and is higher than in Germany and France.
During the second quarter of this year, total inflation in Belgium increased to 9.9%, the Price Observatory of the FPS Economy, published on Thursday, showed. This is the highest level since calculations according to the Eurostat method began in 1997.
"Since the second half of last year, total inflation in Belgium has been rising every quarter," the report read. While energy inflation contributed to two-thirds of the rise of total inflation, and the skyrocketing prices of food, services and industrial goods also played a major role.
Food inflation was 6.5% during the second quarter of 2022 (up from 0.2% in the second quarter of 2021), largely due to the strong rebound of demand after the lockdowns, which coincided with the continued disruption of international supply chains, further exacerbated by the war in Ukraine. The cost of services and industrial goods increased three-fold to 3.6% and 3.4%, respectively.
Comparing neighbouring countries
The FPS Economy report included the inflation rate in Belgium's neighbouring countries (Germany, France and the Netherlands), showing that total inflation started to rise sharply from mid-2021 in all countries.
In the Netherlands, total inflation is even higher (10.4%), while it was much lower in Germany (8.3%) and in France (5.9%) due to the differences in energy inflation, which was considerably lower in the latter two countries that also incorporate the wholesale prices for energy in the consumer prices in a different way.
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"Price changes in the price of raw materials, therefore, have a greater impact on Belgian energy prices for households, both downwards and upwards as at present," the FPS Economy stated.
This becomes evident when looking at the underlying inflation (increase in the consumer price index, excluding the change in prices for fruit, vegetables and energy), which was 4.2% in Belgium in the second quarter, similar to the level seen in Germany (4.4%) and the Netherlands (4.6%). In France, this was 3.3%.