Decrease in Consumer Price Index
The latest statistical data released by Statec (Institut national de la statistique et des études économiques du Grand-Duché de Luxembourg) reveals a moderate increase in inflation for the month of July, rising from 3.2% to 3.7%. Simultaneously, the Consumer Price Index (CPI) experienced a slight decline of 0.5%.
This decline in the CPI is a recurring phenomenon observed annually during this period, primarily attributed to the impact of summer sales on final retail prices. Notably, this decrease was most pronounced in the category of clothing and footwear, where prices saw a significant drop of 11.5%.
Despite this marginal overall decrease, the current year witnessed notable cost escalations in various consumer spending sectors, notably including travel and domestic services. Travel-related expenditures witnessed a considerable surge of 17.8%, with air travel costs slightly surpassing that at 18.3%. This uptick in travel expenses is commonly associated with heightened demand during school holiday periods.
Several other categories also experienced price hikes, including domestic services (2.5%), hospitality (0.4%), and financial services (1.2%).
In the realm of fuel prices, diesel recorded a modest month-on-month increment of 1.3%, along with a 2.1% rise in heating oil costs. Conversely, the cost of petrol saw a decrease of 1.2%. It is noteworthy that, despite this slight rise compared to June, the collective cost of petroleum products remains 12.8% lower than in July of the preceding year.
Across much of Europe, the escalating cost of food has garnered significant attention and concern among policymakers in recent months. For the month of July 2023, Statec’s data revealed a
marginal average price decrease of 0.1% in this category, marking the first decline since September 2021 when compared to June.
Digging deeper into the specifics, the most substantial price drops were observed in fresh fish (-4.7%), followed by fresh vegetables (-3.8%), fresh fruit (-2.4%), and olive oil (-2.3%).
However, certain food categories continued to witness price increases, most notably potatoes with a 4.2% rise. Confectionery and chocolate also experienced price hikes of 1.8% and 1.2%, respectively.
It is important to note that these comparisons are drawn against the previous month, June. On an annual basis, when compared to July of 2022, food prices have surged by 10.4%.
