In LuxembourgAn additional index by the end of 2022, tripartite in sight
LUXEMBOURG – Statec is planning a new index tranche in the fourth quarter of 2022. This could trigger a new tripartite meeting.
The index slice that we did not necessarily expect. Statec updated its price forecasts on Wednesday. Inflation should reach 6.6% in 2022 and 5.3% in 2023. Statec thus anticipates a new index tranche for the fourth quarter of this year, after the one which had been postponed to the beginning of the summer and the one which came into force on April 1.
It remains to be seen what we are going to do with this slice of the end of 2022 index. Report or application? Not sure that the 2.5% increase is under the Christmas tree, the social partners will probably have to discuss. The government therefore asked Statec to refine its analyzes and update its forecasts at the beginning of September. “Based on this development, a next meeting of the Tripartite Coordination Committee could be convened,” the statement wrote. Unions, employers and government could therefore return to the table.
“With the social partners, we will find common solutions that will relieve people and businesses,” reacted Prime Minister Xavier Bettel on Twitter. “Social dialogue is and remains an important crisis tool and part of our success story. The government does not leave anyone” by the wayside.
Statec notes that the war in Ukraine and tensions in global supply chains continue to drive up inflation. And the increasingly important risks of gas shortages do not help matters. Such shortages could have serious repercussions on the price of electricity.
China and Russia
The statistical institute notes, however, that inflation slowed in July, falling to 6.8% over one year, after a peak of 7.4% in June. And “the inflation rate should follow a downward trend and end the year 2023 around 3%”, notes Statec. Excluding petroleum products, inflation continues at a sustained pace, with 4.7% in July and 4.8% in June, a “dynamic which should persist until the end of 2023”. Energy prices and the fall in the euro reinforce this high inflation, excluding oil products.
Prices in Luxembourg owe a lot to the global context. In addition to the war in Ukraine, China’s “zero Covid” policy is causing great disruption to global production chains, with millions confined to the slightest case. This also increases prices. In Europe, the sanctions against Russian aggression in Ukraine have “reinforced these pressures on prices”.