Inflation continues to fall in the Grand Duchy. It even reached its lowest since the start of 2021, with a rate of 0.95% in October, notes Statec in a note published this Wednesday. This contained increase in prices is mainly due to a clear decline in those of petroleum products. The latter “have displayed negative annual rates since August with inflation of -12% over one year on average over the last three months (compared to +1% on average from January to July), explained in particular by a decline in prices at the pump (-6% in the third quarter, compared to the second quarter of 2024), as well as the price of fuel oil (-14.0%) and gas (-4.0%),” details the statistics institute.
Underlying inflation (excluding electricity) also contributes to this slowdown, with a moderate increase in the prices of services, food (+1.3% over one year) and even non-energy industrial goods. The institute thus revises its inflation forecast for this year to 2.1%, compared to 2.3% previously.
Taking into account the evolution of price shields on electricity and gas prices, expected from next year, and the fall in oil prices, the institute also corrects its forecast for 2025. It now sets inflation at 2.5% compared to 2.6% previously. “According to the inflation forecasts of the central scenario, indexation (editor’s note: of salaries and pensions) would take place in the first quarter of 2025, i.e. one quarter later than anticipated in the August forecasts,” concludes Statec.
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