The annual inflation rate accelerates to 2.4% in March

Annual inflation rises from 1.3% in February to 2.4% in March 2026, following the surge in energy prices over recent weeks.

Chart 1: Annual inflation rate and contributions

Source: STATEC

Due to the closure of the Strait of Hormuz caused by the war in Iran, energy prices rose sharply in March. The aggregate index rises by 12.2% compared with February (the year-on-year change stood at 6.1% in March, compared with -7.7% in February). The rise was particularly marked for heating oil, which climbed by 37.3% compared with February, and by 33.2% year-on-year. Motor fuels also show an exceptional 15.6% rise in a single month, the sharpest monthly increase ever observed in the CPI. By way of comparison, in March 2022, the monthly increase had reached only 11.8%. The price per litre of diesel thus increases by 22.2% in one month, and that of petrol by 10.7%. In contrast, gas and electricity prices remained stable in March. 

Food prices (including alcohol and tobacco) show an annual increase of 2.7%. Several sub-components stand out: fresh meat (+5.6% year-on-year), vegetables (+3.6%) and coffee (+11.5%). Conversely, prices for vegetable oil (-4.7%) and pasta (-3.1%) are falling. Food prices are up slightly by 0.2% compared with the previous month, whilst prices for alcoholic beverages are down by 1.6%, due to promotions on wine (-2.0%), spirits and liqueurs (-1.4%) and beer (-1.0%). Year-on-year, prices for alcoholic beverages fell by 0.7%. 

Services prices rose by 2.5% year-on-year, compared with 2.2% in February. This increase is mainly due to higher prices for package holidays and fees for nurseries and after-school care centres. Increases are also observed for bank charges (+8.0% year-on-year, and +6.7% month-on-month). Conversely, promotions on bundled telecommunications services are weighing on the aggregate for services.

The aggregate for non-energy industrial goods recorded the lowest annual increase (+1.0%). The strongest annual change was observed for jewellery and watches, which rose by 8.5% year-on-year. Price rises were also recorded for household cleaning and maintenance products (+5.3% compared with March 2025). On the other hand, home furniture was subject to promotions in March, resulting in a monthly fall of 1.4% in its selling prices.

Table 1: Price changes for the four main IPCN aggregates

Source: STATEC

The annual inflation rate climbed to 2.4% in March, up from 1.3% in February. The all-items index excluding energy rose from 2.0% to 2.1%. The all-items index for March, based on a 2025 base of 100, stands at 101.39 points. The half-yearly average of the index linked to the base date of 1 January 1948 rose from 1034.45 to 1035.12 points. The next indexation will be triggered when the value of 1038.79 is reached. The next wage indexation remains scheduled for the second quarter of 2026.

TABLE 2: Price changes in the 13 divisions of the IPCN

Source: STATEC

Chart 2: Evolution of the Price Index and Inflation in Luxembourg

The chart shows the parallel evolution of the price index (yellow line) and the annual inflation rate (blue line) in Luxembourg since 2016. The horizontal lines indicate the various index thresholds corresponding to index tranche levels. The index gradually moves towards the current threshold, while inflation fluctuations explain periods of faster or slower progression.

The results of the April 2026 index will be published on 6 May 2026, following the monthly meeting of the Index Committee. A preliminary estimate of the annual inflation rate will be published on 30 April 2026.