Inflation Rate Up from 6.8% to 7.4%, Family Allowances to Increase from July

According to Luxembourg's statistical agency, Statec, the annual rate of inflation in the Grand Duchy stood at 7.4% in June 2022, up from 6.8% the previous month.

In June 2022, the national consumer price index, calculated by Statec, posted a monthly increase of 0.8%, partly explained by marked increase in the price of petroleum products by 6.1% in one month, asociated with continued increase in prices of food products.

Compared to the previous month, diesel prices rose by 8.1% and petrol was up by 11.1%. The price of heating oil rose by 5.8%.

Food prices continue their upward trend and increased by 1.2% in monthly comparison. Among the products which, between May and June, weighed the most on the trend, were fresh fruit (up 2.8%), poultry meat (up 3.7%), red meat and veal (up 1.6% ) and bread (up 2.6%). However, other items on recorded price drop as well. This is particularly the case for fresh fish (down 2.7%), prepared meals (down 1.1%) and chocolate (down 0.8%). Price increases nevertheless remain dominant and in annual comparison, the checkout of food products has increased by 7.0% for consumers.

In addition, inflation is boosted in June by an increase in package travel prices, which rose by 10.1% over one month. Plane tickets, on the other hand, fell by 4.9% in monthly comparison, but were still higher by 27.3% compared to June 2021.

The prices of alcoholic beverages fell by 0.7% compared to May following promotional actions on the prices of spirits and liqueurs (down 1.1%) and beer (down 1.0%). Television prices also fell by 2.7% under the effect of several promotions in June. In addition, price reductions were noted for
plants and flowers (down 2.4%).

However, these few downward movements had no bearing on the general inflationary trend, as evidenced by the annual inflation rate. It increased to 7.4% against 6.8% a month earlier. The underlying annual inflation rate gained 0.3% and stood at 4.8% in June. The general index for the month of June expressed in base 100 in 2015 amounts to 116.75 points. The half-yearly average of the index linked to the base 1.1.1948 rose from 936.68 to 944.33 points and thus exceeds the threshold for triggering an index line which was set at 941.12.

Pursuant to article 3 of the law of 29 June 2022, the indexation of wages, salaries and pensions will take place on 1 April 2023. Articles 4 to 6 of the law of 29 June 2022 create a sliding scale of family allowances (echelle mobile des allocations familiales - EMAF), which adapts the amounts of family allowances to the cost of living. In accordance with the legislation in force, the adaptation of family allowances takes place the month following its initiation. Consequently, the EMAF application rating of 898.93 points (old rating: 877.01 points) come into force on 1 July 2022.