Prices of petrol products, the main driver of inflation, rose 59.2% last month compared to April 2021, Statec said. But materials shortages and supply chain bottlenecks as well knock-on effects of the energy crisis are also driving up prices in other areas.

Food prices, for example, were up 5.42% in April compared to last year. The price for housing--including water and utilities--was up 12.73%. The cost of furniture was up 5.13%. Seasonal effects of the Easter holiday meanwhile contributed to pushing up prices for plane tickets (+31.4%) and package holidays (+10.8%).

Statec has revised its predictions for inflation in 2022 and 2023 upwards. “The escalation of the war in Ukraine and China’s strict lockdown measures will make a number of raw materials more expensive and disrupt some supply chains,” the office said.

More than two thirds of the items in Statec’s basket of goods are seeing price increases of more than 2% year-on-year. For nearly half of the items, prices have gone up more than 4%.

Indexation would be due in June

For 2022 as a whole, Statec now estimates inflation of 5.8%, up from a 4.4% forecast issued in February. In 2023, the rise in prices could slow down to 2.8%, up from a previous forecast of 1.3%.

Given the rise in prices, Statec said the next indexation of wages would already be due in June, with the last wage increase triggered in April to adjust salaries to inflation. However, under an agreement between the government, employers and employee organisation, the next index payment has been delayed until the first quarter of 2023.

Should a second indexation payment be due in 2023, this will be delayed until 2024. This agreement was reached to help cushion the blow to businesses who face higher prices for energy and raw material costs as well as the impact of indexation on payroll.

Trade union OGBL had opposed the so-called “Solidaritéitspak” (solidarity package), agreed by the tripartite committee, saying it would lock in the indexation of wages until 2024.