Following the publication of the text of the preliminary draft Grand-Ducal regulation concerning the establishment of the consumer price index (Annual update of the weighting scheme of the index), Luxembourg's Chambre de Commerce has called for a fundamental rethinking of the indexation system as it is currently in force and considers that it would be wise to refine the current index in light of the transition to a new economy.
The chamber believes that the current system of automatic and full indexation of salaries, pensions and many social benefits, to the increase in the cost of living, is contrary to economic objectives, social justice and ecological transition. It has asked that the current price index be adapted to environmental issues, by reducing its sensitivity to energy products, mainly fossil fuels.
The chamber estimates that the national consumer price index should be established net of taxes and excise duties insofar as the inclusion of these elements, coupled with the indexation mechanism, transforms a tax on consumption into a tax on production.
In its summary, the chamber confirmed that, subject to the general considerations formulated, and in particular its opposition to the principle of automatic indexation of wages, pensions and social benefits, the updating of the weighting scheme of the consumer price index does not give rise to observations from the Chamber of Commerce. It therefore approves the new weighting, as proposed by STATEC.
These new weighting would see an increase in 5 of the 12 areas, as follows:
03. Clothing and footwear items (+6.8 IPCN points)
04. Housing, water, electricity, gas and other fuels (+2.8 IPCN points)
05. Furniture, household items and routine housing maintenance (+2.5 IPCN points)
07. Transport (+1.5 IPCN points)
08. Communications (+0.2 IPCN points)
with the other 11 areas seeing proposed decreases, as follows:
11. Hotels, restaurants and cafes (-9.8 IPCN points)
01. Food and non-alcoholic drinks (-9.5 IPCN points)
12. Miscellaneous goods and services (-7.4 IPCN points)
09. Leisure and culture (-6.9 IPCN points)
06. Health (-2.8 IPCN points)
02. Alcoholic beverages and tobacco (-0.5 IPCN point)
10. Education (-0.2 CPI points)
In conclusion, the Chamber de Commerce stated that it is in a position to approve the preliminary draft of the Grand-Ducal regulation, subject to an opinion on its technical aspect.