POLITICS & INSTITUTIONS - ECONOMY

Consumer Price Index

Statec predicts an earlier wage indexation



Based on the latest calculations, an earlier wage indexation is likely to take place. Jne Valokuvaus/Shutterstock.

Based on the latest calculations, an earlier wage indexation is likely to take place. Jne Valokuvaus/Shutterstock.

End of summer sales triggered a monthly increase of 1% in the national consumer price index calculated by Statec for the month of August, which also saw the annual inflation rate rise to 2.5%. Based on the latest calculations, an earlier wage indexation is likely to take place.

The national consumer price index rose by 1% in August compared to July mostly due to the end of summer sales, and the annual inflation rose slightly from 2.3% to 2.5%. 

Apart from the price changes due to end-of-summer sales, the prices of goods and services excluding petroleum products rose by 0.3% in one month.

One of the main monthly price variations was observed in the sale of clothing and footwear, which went up by 13.6% between July and August.

Also last month, the prices for package holidays increased by 6.4% and grew by 24.2% for air travel. The price of food rose by 0.5% especially for fresh seafood (+4%), olive oil (+3.7%) and fresh fruit (+3.7%).

On the other hand, August was also marked by a decline in the prices for rice (-1.5%), eggs (-1.2%), non-alcoholic beverages (-1.6%) and alcoholic beverages (-0.1%). However, on an annual basis, food prices rose by 1.4%.

Following a rise in petroleum products observed last month, prices decreased by 0.2% in August compared to the previous month. This is mainly due to the fact that the price of fuel and heating oil decreased by 1.6%.

The half-yearly average of the index went up from 890.73 to 894.40 points in August instigating Statec’s early prediction of the next indexation, which ought to be triggered when it reaches 895.78 points.

Luxembourg Chamber of Commerce director general, Carlo Thelen, had mentioned the likely repercussions this could have on companies, who are prone to be penalised on two levels. First with the rise in raw material prices and then by an increase in wage costs through indexing.