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STATEC's latest data indicates that a new wage indexation in Luxembourg is unlikely to occur before spring 2025, as inflation continues to ease.
Luxembourg is unlikely to see another wage indexation before year's end. On Monday, the National Institute of Statistics and Economic Studies (STATEC) announced that a wage indexation in November "seems unlikely."
This statement from STATEC confirmed earlier reports suggesting that a new wage indexation is increasingly improbable before the end of 2024. Instead, it is now expected to occur in the spring of 2025.
According to data from September 2024, the national consumer price index, calculated by STATEC, showed a monthly decrease of 0.4%. This decline was primarily driven by a significant drop in petroleum product prices and lower travel costs. STATEC also reported that the annual inflation rate in September was 1.3%, down from 1.7% in August and 2.0% in July.
The half-yearly average of the index increased slightly, from 1011.17 to 1012.12 points, according to STATEC. The next wage indexation will be triggered when the index reaches 1013.46 points. Despite the small gap of 0.13% between these values, STATEC cautioned that "a trigger as early as next month seems unlikely," referring to November.
For wage indexation to be activated in November and applied in December, the annual inflation rate would need to rise above 1.63% in both October and November 2024. STATEC is set to release the next update on inflation forecasts on 6 November.
Sharp decline in fuel prices
For the second consecutive month, petroleum product prices in Luxembourg saw a significant decrease in September. Compared to August, fuel prices fell by 4.3%, with diesel prices dropping by 4.4% and petrol prices by 5.4%. The price of heating oil fell by 8.5%.
Compared to September 2023, fuel prices have fallen by 14.9%.
© Source: STATEC
STATEC also noted a substantial decline in travel-related costs. Package holiday prices dropped by 10.1% in September compared to August, while airline ticket prices fell by an average of 20%.
Rise in childcare costs
In contrast, prices for childcare services, including crèches and drop-in centres ("maisons relais"), surged by 13.3% in September compared to August.
Accommodation costs also increased, with prices for hotels, motels, and hostels rising by 2.6%. The catering sector saw a slight increase of 0.3% in September. Meanwhile, the cost of internet access jumped by 6.3%. Overall, service prices rose by 3.7% year-on-year and 3.9% on a monthly basis.
Food prices higher than last year
Food prices increased by 0.2% in September compared to August, primarily due to higher prices for fresh fruit (+4.4%) and fresh vegetables (+2.3%).
The most significant price reductions were seen in chocolate (-3.5%), potatoes (-2.5%), and fresh fish (-2.9%). Despite these declines, overall food prices in September 2024 were still 1.5% higher than they were a year ago.
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