A general increase in salaries and pensions for the end of this year, a second next year: Statec has just refined its calculations for employees and retirees in Luxembourg.
April 2024 and its low inflation pushed Statec analysts to bring out their calculators. And according to their analysis, it is now credible to announce the arrival of two indexations within 18 months future. The first would always occur in end of 2024; the second could occur during the 3rd quarter 2025.
In fact, on his scenarios, two big unknowns currently weigh. Certainly the prices of food, for example, and everyday consumer goods, now seem to be less subject to increases. But what will happen tomorrow fuel prices and of energy ? Two expenses which weigh heavily in household budgets and whose trend is difficult to trace today.
For this year, Luxembourg should see the cost of living increase by +2.3% over twelve months. Perspective upward reviewmainly due to the rebound in the price of oil products lately.
2025 under high tension
The Israeli-Palestinian conflict and Russian-Ukrainian tensions have a negative impact on the amount demanded for a barrel of Brent. Thus, the prices displayed in Luxembourg service stations have increased by +3.5% over one year (compared to +2.4% for general inflation in the country). And Statec does not see no improvement to be expected by summer in this consumption sector, even before a resumption of the price increase at the end of the year and during 2025.
2025 precisely, here again, statisticians express fears. An economic pessimism which pushes them, today, to anticipate a year + 3.1% inflation. A high rate whose justification lies in the end of the energy tariff shield in the Grand Duchy from January 1.
Decided in tripartite at the beginning of 2023, the measure aimed to protect users from rising gas or electricity prices. The shield has had an effect, but its total lifting risks causing the price of m3 and kilowatt to skyrocket. And be careful, we are talking about a bill that would rise by +17% for gas and +60% for electricity…
Even if Statec considers that this perspective must be considered “ with caution », he also established a scenario combining the “worst assumptions” possible. In this case, it is not not one but two indexes which could occur in 2025. Enough to relaunch the debate around the automatic nature of the 2.5% increase in wages, salaries, pensions and other social benefits. A renegotiation of terms of the index desired by Prime Minister Luc Frieden and his CSV-DP majority.
