Inflation forecast: 3.9% for 2023 and 2.5% for 2024

The gradual decline in the inflation rate since October 2022 was widely anticipated and is mainly due to oil prices. Core inflation, however, has been more persistent than expected, mainly due to the surge in food prices. STATEC now forecasts 3.9% inflation in 2023, which would bring forward the next index tranche to the end of the third quarter of 2023. For 2024, however, inflation forecasts have been revised downwards, due to the relative lull in energy markets.

After six months of consecutive declines, annual inflation in April 2023 remains close to that of March (3.7% against 3.6%). This apparent stability nevertheless hides opposite trends between oil prices and underlying inflation. Since February, via negative base effects, oil products have contributed to a fall in the general inflation rate. Underlying inflation, on the other hand, is keeping a steady pace and remains above 4.5%.