Inflation will remain high in 2022 and 2023, according to the National Institute of Statistics and Economic Studies (STATEC). The rise in prices means that the next wage indexation might be triggered before the end of the year, and that a tripartite meeting could be called earlier than expected.

On Wednesday, STATEC published its latest economic forecasts, highlighting the inflationary trend of recent months. Inflation in Luxembourg slowed down in July 2022, reaching 6.8% after peaking at 7.4% in June. It is expected to reach 6.6% for the year 2022 and 5.3% in 2023 if the war in Ukraine continues.


© Statec

"STATEC's calculations also suggest that a new wage indexation will be triggered in the fourth quarter of 2022," the government reports.

As STATEC points out, the low inflation scenario "does not anticipate the next overshoot until Q1 2023". However, both the high inflation scenario and the main scenario anticipate that a new indexation will be triggered in the 4th quarter of 2022, in addition to wage indexations in the 1st and 2nd quarters of 2023.

Xavier Bettel and his ministers have asked STATEC to update its projections for "the first week of September 2022". "On the basis of these calculations, I will convene a tripartite meeting", Bettel tweeted on early Wednesday afternoon. The Prime Minister promises to find "common solutions that will relieve people and companies".

A potentially complicated task since these solutions will have to cover, at a minimum, the new wage indexation anticipated by the end of the year and those that could be triggered at the beginning of 2023.