Consumer price index and inflation page
What is inflation?
Inflation is the general and sustained increase in the prices of goods and services in an economy. It is measured by consumer price indices. In Luxembourg, the consumer price index is calculated using a methodology harmonised at European level and published monthly
STATEC produces two different indices
The Harmonised Consumer Price INDEX (HICP) is the official measure of inflation in the European Union, which is established in accordance with the provisions of Regulation (EU) 2024/3159 and Regulation (EU) 2020/1148. These two European regulations specify the methodology to be used to ensure that the index remains comparable from one Member State to another. This is why the HICP is used to compare inflation trends in different countries and to calculate aggregate inflation, particularly for the euro area or the European Union as a whole.
The National Consumer Price Index (NCPI) is the measure of national inflation. It differs from the HICP only in that it has a different weighting. The weighting of the NCPI is based on the final consumption expenditure of residents on national territory, whereas the HICP takes into account expenditure by both residents and non-residents. As a result, certain items, such as petroleum products and tobacco products (products for which cross-border workers spend a significant amount in Luxembourg), have a lower weighting in the NCPI than in the HICP. The NCPI is used for wage indexation.
From 2026 onwards, the IPCN (and the HICP) will consist of 13 divisions, weighted according to their relative importance in final household consumption. The weighting is revised annually to take account of changes in the consumption structure and is published via Grand Ducal regulation on the advice of the CES and the IPC Commission.
Each division contains several groups, classes and subclasses. In total, the index comprises 307 different items, such as ‘household bread and speciality breads’, ‘frozen vegetables’, ‘heating oil’, ‘dental services’, ‘air travel packages’, etc.
As it is impossible to track the prices of all goods and services, the CPI is based on a sample. For each product category, a sample of representative products is constructed. Within a sample, as many different goods and services as possible are tracked in order to reflect the highly diverse market offering. For example, the ‘bread’ sample includes a wide range of products ranging in price from €1.90 to €5.10. For ‘cars’, prices are tracked for both small cars and large SUVs.
Division |
Share in 2026 (%) |
|
01 |
Food and non-alcoholic beverages |
14.7% |
02 |
Alcoholic beverages, tobacco and narcotics |
3.7% |
03 |
Clothing and footwear |
4.8% |
04 |
Housing, water, gas, electricity and other fuels |
16.3% |
05 |
Furniture, household goods and routine household maintenance |
8.8% |
06 |
Health |
2.3% |
07 |
Transport |
14.8% |
08 |
Information and communication |
2.6% |
09 |
Recreation, sport and culture |
7.2% |
10 |
Education services |
1.1% |
11 |
Restaurants and accommodation services |
8.2% |
12 |
Insurance and financial services |
3.9% |
| 13 | Personal care, social protection and divers goods and services | 11.6% |
What is the sliding salary scale-
« Index » ?
The sliding salary scale is the mechanism used in Luxembourg to automatically index wages to inflation. In Luxembourgish, it is often referred to as the ‘Index’. The mechanism is designed to preserve the purchasing power of employees. The instrument was first introduced in 1921 for railway workers and civil servants. It was extended to the entire economy in 1975. A wage indexation (in Luxembourgish: ‘eng Indextranche’) of the sliding salary scale is triggered when the half-yearly average of the consumer price index (base 100 on 1 January 1948) shows a difference of 2.5% compared to the last maturity rating.
How is the consumer price index calculated?
The basic principle is to monitor the price of the same product or service in the same point of sale each month in order to calculate a relevant price trend. STATEC monitors the prices of different brands, different types, different sizes and prices in different shops.
Surveyors physically visit around 580 points of sale, or contact them by email and telephone, or collect prices from websites. In this way, around 7,700 prices for different goods and services are collected each month. Since 2018, ‘scanner data’, i.e. checkout data, has been included in the regular production of the consumer price index. This consists of electronic files sent directly to STATEC by several supermarkets. With this new data source, around 90,000 additional varieties are included in the CPI calculation. STATEC will continue to use this data source and expand its coverage in the coming years.
How is a new application rating activated?
A new wage indexation is triggered if the half-yearly average of the general index linked to the base date of 1 January 1948 shows a difference of 2.5% from the last maturity rating.
The general index linked to the base date of 1 January 1948 is derived from the IPCN base 2025 and multiplied by a specific link factor. This link factor is a constant and only changes when the law provides for the neutralisation of certain price increases in terms of their effect on the sliding scale (e.g. tobacco excise duties, CO2 tax). The half-yearly average of the linked index is the average of the six most recent indices based on 100=1.1.1948. If this half-yearly average shows a difference of 2.5% from the current maturity rating, a new application rating comes into force the following month, which implies a 2.5% adjustment to salaries, wages and pensions. The new application rate is valid as soon as it is published, and not only at the end of the month.
Inflation over the last 10 years
Over the last ten years, inflation in Luxembourg has fluctuated considerably. In 2016, the average annual rate stood at just 0.3%, and remained below 2% between 2017 and the end of 2020. The pandemic in 2020 led to a sharp drop in energy prices, which helped to keep inflation down during this period.
From the end of 2021 and into early 2022, the euro area, like Luxembourg, faced a sharp acceleration in inflation, mainly due to the marked rise in energy prices. In April 2022, for example, petroleum product prices were 59.4% higher than in April 2021, while town gas and natural gas prices had risen by 84%. This surge in energy prices contributed significantly to the rise in the annual inflation rate, which reached 7.4% in April 2022, its highest level since May 1984. The rise in oil prices also led to an increase in the prices of many other goods, pushing up the overall price index.
Towards the end of 2022, petroleum product prices began to fall again (–17.4% in May 2023 compared to May 2022). In contrast, food prices rose sharply, reaching +13.3% in March 2023 year-on-year. This widespread inflation triggered several indexation tranches during 2022 and 2023.
In 2024 and 2025, average annual inflation approached the 2% threshold, at 2.1% in 2024 and 2.3% in 2025 respectively.
Data
Current inflation figures for Luxembourg :
- National Consumer Price Index (IPCN) (short-term indicator - A1)
- Harmonized Consumer Price Index (HICP) (short-term indicator - A1bis)
- Weighting scheme and reference positions
- User guide « short-term indicator - A1» (in French) (Pdf, 580 Kb)
Historic tables :
Glossary
Inflation = rise in prices in an economic area
Consumer Price Index (CPI): official measure of price changes for a basket of goods and services.
National consumer price index (NCPI): measure of price changes in Luxembourg. The NCPI is limited to the resident population and excludes consumption by non-residents (tourists and cross-border commuters).
The sliding scale of salaries: "Den Index".
Price Index Commission: advises and assists STATEC in establishing CPIs. The commission meets every month before the index is published.
The commission is made up of the following bodies: CGFP, LCGB, OGBL, Chamber of Agriculture, Chamber of Trades, Chamber of Commerce, Ministry of the Economy, Statec.
Economic and Social Council (CES): each year, the CES issues an annual opinion on the list of reference positions for the index and their weighting.
STATEC produces a monthly consumer price index
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