STATEC has updated Luxembourg’s consumer price index basket in order to better reflect households’ real consumption habits.
Such adjustments are not unusual. The basket, which now contains more than 100,000 goods, is revised slightly every year, as stipulated in a Grand Ducal regulation. However, the changes that have just come into force will allow Luxembourg’s data to be more easily compared with that of other EU member states.
Until now, comparisons were more complicated because there were no fully harmonised rules. Although inflation is calculated in every country, the methodology was not identical, making it difficult to compare national inflation rates directly. That is precisely what is now changing, according to Marc Ferring, Attaché at Statec in charge of the Consumer Price Index.
He explained that Eurostat, the European statistical office, has introduced a new classification system which Luxembourg is now applying, in line with other EU countries. As a result, several new categories have been added and certain products have been reclassified.
Previously, goods were not always grouped in the same way across Europe. Ferring cited the example of smartwatches: in some countries they had been classified as traditional watches, elsewhere as sports equipment or alongside mobile phones. He explained that a dedicated European-level category has now been created for smartwatches to ensure that they are classified and calculated in the same way everywhere.
These changes will not affect the inflation rate itself, nor will they have any impact on a future index-linked wage adjustment. However, they bring greater clarity and may allow certain products to be included in the basket under the new rules.
One example is gambling. Ferring noted that households spend money on lottery tickets and scratch cards, which means such spending should be reflected in the basket. Until now, however, there was no agreed European methodology for measuring this properly. He explained that simply recording the price of a scratch card would not be sufficient, as potential winnings must also be taken into account.
Gambling has a weighting of 0.7% in the basket, whereas food carries a significantly higher weight of 14%. Rent also plays an important role, as do fuel, electricity, and gas. By contrast, the very first consumer basket in 1921 contained just 17 products, a figure that has increased dramatically over time.
Ferring added that price collection continues to rely partly on traditional surveys, with investigators visiting shops or contacting retailers by phone or email to record around 7,500 product prices each month. In addition, for several years supermarkets have been transmitting detailed pricing data directly to STATEC, amounting to around 100,000 items.
Overall, the reform is primarily technical in nature, aimed at improving transparency and comparability rather than altering how inflation is calculated in practice. For consumers, the immediate impact will be limited. However, by aligning more closely with European standards and adapting to evolving consumption habits, the updated basket is intended to provide a more accurate reflection of how households in Luxembourg actually spend their money.
