The cost of food and non-alcoholic beverages fell by -0.25% in July 2024, compared to July 2023 prices, Statec reported on 7 August 2024. Library picture: Matic Zorman (2020)

The cost of food and non-alcoholic beverages fell by -0.25% in July 2024, compared to July 2023 prices, Statec reported on 7 August 2024. Library picture: Matic Zorman (2020)

Consumer prices dropped by 0.6% in July 2024, causing the grand duchy’s statistics agency to cautiously predict that inflation would be held in check for the rest of the year. Nevertheless, it expects a round of indexation later this year and another in 2025.

“Luxembourg’s inflation rate continues to slow down,” according to Statec, the grand duchy’s statistics bureau.

The annual inflation rate was 2% in July 2024, “a level not seen since the beginning of 2021,” Statec on Wednesday.

Core inflation, which excludes volatile food and energy prices, was 2% in July (compared to 4.9% the year prior) and the price of petroleum products rose by 1.3% year-on-year (compared to +4.2% in May 2024).

Statec said it was maintaining its inflation forecast of 2.3% for the full year and expected that , automatic rises in salaries and pension payments, would be triggered during the fourth quarter of 2024.

“Next year, inflation has been revised down to 2.6% (from 3.1% previously), taking into account the partial lifting of electricity price shields,” Statec stated. Another indexation tranche was forecast for the fourth quarter of 2025.

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