Annual inflation in Luxembourg remained stable at 1.3% in February, according to a new report published by the National Institute of Statistics and Economic Studies (STATEC) on 4 March. However, for workers eyeing the next automatic wage adjustment, the figures offer little immediate prospect of movement.
The six-month average of the index (base date: 1 January 1948) has fallen slightly, from 1035.63 to 1034.45 points. The next indexation threshold, which triggers an automatic increase in wages, pensions, and social benefits, sits at 1038.79 points. This leaves a gap of more than four points before any adjustment is set in motion.
Food prices continue to be the primary contributor to inflation, rising by 3.1% year-on-year. Notable increases include fresh meat (+7.9%), chocolate (+11.9%), and vegetables (+2.4%). These were partially offset by declines in pasta (-6.3%), cereals (-3.3%), and vegetable oil (-3.2%). On a monthly basis, food prices remained nearly stable, dipping by just 0.1%.
The largest monthly price increase was recorded in non-energy industrial goods, which jumped by 3.4%. This surge is largely attributed to the end of the winter sales period. Clothing and footwear prices rose by 19.3% compared to the previous month, although the year-on-year increase remains moderate at 0.7%. Other items, including household appliances and jewellery, followed a similar pattern of returning to regular prices. STATEC noted that without the effect of the sales, the monthly increase for this category would have been just 0.3%.
Overall, energy prices remain down by 7.7% year-on-year. Electricity costs continue to benefit from the state’s contribution to network tariffs. However, the downward trend in fuel prices has halted. Diesel rose by 2.8% over one month, petrol by 2.0%, and heating oil by 5.4% – though heating oil remains 8.9% lower than the same period last year.
Services prices increased by 2.2% over one year, a more moderate pace than in January. Rents for existing tenancies rose by 1.3%. Given their 6.7% weighting in the index, rents have a significant impact on overall inflation figures.
With inflation stable and the six-month average still below the trigger point, no automatic indexation is currently on the horizon. Prices would need to accelerate for the next threshold to be reached.
The March inflation figures are scheduled for publication on 8 April, with an initial estimate available from 31 March. This data will provide a clearer indication of whether the index is approaching the threshold and if wage and pension increases can be expected in the near future.
