Annual Inflation Drops from 2% to 1.7%

On Wednesday 4 September 2024, Luxembourg's national statistical institute, STATEC, reported that the annual inflation rate had dropped from 2% to 1.7% over one month.

In August 2024, the national consumer price index, calculated by STATEC, rose by 1.2% compared to the previous month, mainly due to the end of summer sales. By neutralising the variations due to the sales and excluding petroleum products, the prices of other goods and services rose by 0.4%.

STATEC added that the return of prices of products on sale during the month of July to normal levels explained the monthly increase of 16% in the "clothing and footwear" division. Compared to August 2023, clothing prices rose by 1.2% and footwear prices by 0.7%. Other categories impacted by the end of the sales were furniture (+2.5%), jewellery (+5.3%) and household appliances (+3.3%).

With the peak of the summer season, package holiday prices increased by 7.7% and passenger air transport rose by 13.4% over one month. Prices for crèches and other childcare centres ("maisons relais") increased by 9.1% compared to the previous month. Decreases which strongly contributed to the inflation rate were noted for telecommunication services (mobile phone service: -2.2%; internet access: -1.4%; multi-service telecommunication offers (bundles): -2.1%). Despite this decline, the aggregate of services increased by 3.9% over one year, compared to 3.5% the previous month.

STATEC noted that food prices remained stable compared to July. However, this hides at a more detailed level certain opposing price movements that offset each other. Consumers had to pay less in August for olive oil (-5.4%), confectionery (-2.1%) and flour (-2%). However, other items on supermarket shelves saw price increases. This was particularly the case for fresh fish (+3.4%), potatoes (+2%) and coffee (+2.7%). Compared to the previous year, food prices were 1% higher.

Regarding fuel, diesel prices fell by 4.1% and petrol prices fell by 3.2% compared to July. The price of heating oil dropped by 7.2% while that of town gas did not change. Compared to August last year, the prices of petroleum products were 8.4% lower.

The annual inflation rate thus stood at 1.7% in August 2024, down from 2% one month earlier. The annual core inflation rate increased by 0.3 percentage points and stood at 2.3% in August. The general index for the month of August expressed in base 100 in 2015 was 123.76 points. The half-yearly average of the index linked to the 1.1.1948 base rose from 1009.24 to 1011.17 points. STATEC recalled that the next indexation will be triggered when the value of 1013.46 is reached.