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The household energy bill has swelled by 8 billion euros: can the indexation of wages compensate for the soaring prices?

  • Post category:Economy News
  • Reading time:2 mins read

8 billion euros is the amount that Belgian households have spent more on their energy over the past year. An economist compared this year’s prices with those charged in 2019, before the health crisis. According to him, the indexation of wages should compensate for the explosion in prices, at least in part.

Heating your home, turning on the stove… all these actions, as we know, have cost you more in recent months. Thanks to some calculations, an economist has quantified the overall cost of the crisis for all households.

“These are data from the national bank which break down the 250 billion euros that households spend in Belgium in a year. They break it down in a year”, explains Philippe Ledent, an economist for ING bank.

Take the energy category in 2019: Belgians spent 19 billion euros. But with the crisis, households have paid 6.1 billion euros more for electricity, gas and heating oil. Add to that 1.9 billion euros more for fuel. The bill increases by 8 billion euros. Total cost: 27 billion, for energy, since September 2021.

“We are at this time at the start of the reopening period (during the health crisis), which has created strong demand after all the restrictions in a context in which supply remains disrupted”, adds Philippe Ledent.

Then comes the war in Ukraine, which pushes prices up further (+106% for gas alone). The bill could have been higher, without the intervention of the State, which notably lowers the VAT on gas and electricity. Another important data: the indexation of wages, which should cover a good part of the additional 8 billion euros.

“Between 3/4, maybe even all of it if I take it at the macroeconomic level, has been absorbed by indexation”, says Philippe Ledent.

That said, energy prices continue to rise. The total surplus for the year 2022 should therefore exceed 8 billion euros.