Economy & Politics

What if the index arrives before the end of the year …

In view of the evolution of inflation, Statec has revised the possible date of a next automatic reassessment of salaries. Thus, payslips could swell 2.5% by the end of the year.

Patrick JACQUEMOT

Patrick JACQUEMOT

In view of the evolution of inflation, Statec has revised the possible date of a next automatic reassessment of salaries. Thus, payslips could swell 2.5% by the end of the year.

Inflation is picking up. And this is in part due to the persistent rise in oil prices. More generally, from April 2020 to April 2021, Statec recorded a rise in consumer prices of 2.1%. Inflation which, if confirmed, could trigger the index ahead of expectations hitherto mentioned by the statistical agency. The year 2021, which began with the increase in the minimum wage, could thus end with the general increase in all labor income.


Telecran- President of the Verbraucherschutzes Nico Hoffmann, ULC, Luxembourg. Photo: Chris Karaba

Worried about the effects of the “spiral of inflation” at the start of the year which “mainly affects small and medium incomes and retirees”, the Union des consommateurs (ULC) is asking the government “for concrete measures to preserve and strengthen purchasing power ”.


Before the end of last year, such a triggering of the index tranche was not expected before mid-2022. But with the economic recovery, consumers may see some increases in their daily lives. Food products, drinks, rent, electricity, costs related to transport, telecom subscription could thus weigh more heavily on the portfolio of households in the months to come. Just as certain shortages (in industry and construction) could inflate the invoices of certain productions.

According to the latest Statec projections, the inflation rate should be around 2% in 2021. With a decline to + 1.6% envisaged for 2022. In its lowest inflation assumptions, the statistical service indicates that indexation would then be postponed to the first quarter of 2022.

While unemployment continues on the path of regression and household savings, it continues to climb (1.6 billion euros from March 2020 to today), the contained increase in inflation in Luxembourg should not constitute a major danger.


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