Economy: The pace of consumer price increases has dipped to Luxembourg’s lowest level in more than a year.
Increases in the cost of living slowed last month, the EU’s official statistics agency has reported.
Harmonised consumer prices rose 1.4% last month, Eurostat said on Monday. That is the lowest figure in more than a year. Inflation had averaged 2.4% over the 12 months ending May 31, and was 2.9% during the 2012 calendar year, the agency said.
The news is likely to be welcomed by employers and Luxembourg’s finance ministry, since it could push out the next round of indexation, or automatic increases in salaries for all employees and state pensions.
Indexation is triggered when the Grand Duchy experiences average inflation of 2.5% of more over six a month period, although a 2012 reform means rises occur at most once per year.
The overall rate of inflation in May 2013 was reduced by declines in the cost of transport (-1.4%) and communications (-0.1%), and relatively low increases in the price of fuel, housing and utilities (+0.3%) and healthcare (+1.1%).
However, notable inflation was still seen in alcoholic beverages and tobacco (+3.0%), goods and services that include personal care and financial services (+3.4%), and food and non-alcoholic beverages (+3.9%).
Costs climbing at euro average
The Grand Duchy had the 13th highest annual inflation rates in May among the EU27 and the 9th highest among the 17 euro zone countries. Luxembourg’s overall 1.4% inflation rate was the average among euro area countries.
Consumer prices gained 1.6% in Germany, 2.5% in Finland and 3.1% in the Netherlands, for example. The highest rates in the EU were recorded in Romania (4.4%) and Estonia (3.6%).
The EU27 average in May was 1.6%, according to Eurostat.
At the same time, the Grand Duchy’s inflation rate was higher than in Belgium (1.1%) and France (0.9%). Consumer prices decreased in Latvia (-0.2%) and Greece (-0.3%), and in non-EU Switzerland (-0.2%).