Credit: STATEC

On Wednesday 5 June 2024, Luxembourg's national statistical institute, STATEC, reported that the annual inflation rate had risen to 2.6% in May 2024.

Last month, the national consumer price index, calculated by STATEC, rose by 0.3% compared to the previous month - an increase attributed to rising service prices.

The services aggregate rose by 1.0% compared to April 2024. Airline ticket prices soared by 19% over one month. Package holiday prices similarly increased by 9.0%. Prices for nurseries and daycare centres for children rose by 8.6% compared to the previous month. Multi-service telecommunications offers (+8.0%) also fuelled inflation in May. Over one year, service prices increased by 4.0%.

Food prices rose by 0.3% compared to April. The largest price increases compared to the previous month were noted for fresh seafood (+5.3%), olive oil (+3.7%) and flour (+3.4%). The prices of crisps (-3.3%) and fresh fish (-2.7%), on the other hand, fell compared to April. Price drops were also noted for drinks: mineral water prices decreased by 2.5% and those of soft drinks fell by 1.6% compared to the previous month. In annual comparison, food prices were 2.1% higher and those of non-alcoholic drinks were 3.7% higher.

Increases with a visible impact on inflation were noted for plants and flowers (+2.7%), hotels, motels and inns (+1.5%) and tobacco (+1.2%).

At the pump, motorists had to pay 5.0% less for a litre of diesel and 3.1% less for a litre of petrol in May compared to April. Heating oil bills fell by 8.6%. The prices of products derived from black gold in the index basket were 4.2% higher than in May 2023.

The annual inflation rate thus stood at 2.6%, compared to 2.4% a month earlier. The annual  underlying inflation rate gained 0.1 percentage point and stood at 2.5% in May. The general index for the month of May expressed in base 100 in 2015 amounted to 123.18 points.

STATEC noted that for the calculation of the sliding salary scale (wage indexation), the law provides for the neutralisation of increases in taxes and excise duties levied on the prices of tobacco products. From May 2024, this measure causes the setting of a new connection coefficient (8.22260) linking the consumer price index base 100 in 2015 to the index base 100 on 1.1.1948. The half-yearly average of the index connected to the 1.1.1948 base has gone from 1002.11 to 1004.46 points. STATEC added that the next indexation will be triggered when the value of 1013.46 is reached.