Inflation you said?

March 24, 2023 Ernest Partners

5,4%: in February the Belgian HICP (Harmonized Index of Consumer Prices) reached its lowest point in over a year and it has been decreasing for the 4th month in a row. That sounds like good news, right?
While the HICP of the Eurozone still stands at 8,5% the decreasing energy prices in Belgium are behind the steep decline of the inflation figures. This latter impact is more visible in Belgium than in other European countries because back in 2021 energy prices started rising earlier here than in the rest of Europe (during 2022 Belgium was consistently ranked amongst the countries with the highest inflation in the Eurozone).
However, looking at the core inflation (excluding the impact of energy and unprocessed food items) the conclusion isn’t that exciting… Reaching 8,5%, the core inflation in Belgium is still uncomfortably high and has been on the rise since March last year, severely impacting many aspects of daily life. The heaviest inflationary pressure is coming from increased food prices peaking at 19,4% when compared to 18.8% in February.

In that context, no doubt that following last week’s interest rate hike (+50 basis points) the ECB will maintain its trajectory and commitment to fight the inflation.
Nevertheless, the 2% medium-term target seems still quite far away…

Sources: (Dutch) (English)