Inflation in Belgium rose to its highest level since 1983, driven primarily by high fuel prices, according to the country’s national statistics office.
Statbel said the consumer price index (CPI), used to measures the rate of inflation in Belgium, increased from 5.71%to 7.59% between December and January.
Euronews spoke to Belgian consumers on the ground, who all noticed the change in prices in recent months.
“All prices have increased…I think it’s difficult for people because not everyone has found work during this COVID period,” shopper Martine said.
One shop owner called Wares said higher prices in products like canned beer mean that he ends up losing out.
“They [distributors] increase cans by 16 cents, but we can’t increase the price,” Wares told Euronews. “The customer who is coming to buy one can, they get angry.”
But unlike most EU countries, in Belgium, wages rise when inflation rises.
The main difference is that in Belgium it is done automatically to match the inflation. The system allows citizens not to lose purchasing power.
Ahmed Laaouej, leader of the Socialist Party in the Chamber of Representatives of Belgium says this system is necessary to protect the average worker.
“With an increase in the price of energy, an increase in foodstuffs, consumer products, in short, basic necessities, it is fundamental that people can continue to meet their needs,” Laaouej told Euronews. “This is why we have this principle which is extremely essential, and which provides for the obligation to increase wages, allowances, pensions when the price of products also increases.”
Some businesses are asking for an end to this automatic indexation, however, including the Flemish business association VOKA, which says that it would help companies avoid losing their competitiveness.
“This system is harmful to our competitiveness,” Hans Maertens, CEO of VOKA said. “In the long term, we must discuss the automatic system of indexation and the increase in wages with the unions.”
For now, Belgium’s Prime Minister Alexander de Croo is against getting rid of the automatic indexation, but if inflation keeps rising at the current rate, then he may have to reconsider.
