Luxembourg Inflation Steady At 2.7%, Prices Growth Forecasts Raised

(RTTNews) - Luxembourg's consumer price inflation was unchanged in October after accelerating in the previous six months and the statistical office raised the inflation projections for this year and next, citing the small-than-expected decrease in fuel prices in the third quarter.

The consumer price index rose 2.7 percent year-on-year, same as in September, preliminary data from the statistical office STATEC showed Wednesday. Inflation is at the highest level since March last year, when it was 3.1 percent.

Core inflation, which excludes prices of energy and fresh food, accelerated to 2.5 percent from 2.4 percent.

Petroleum product prices were 7.0 percent higher than the same month last year. Services costs rose 2.8 percent and food prices climbed 2.2 percent from a year ago. Consumer prices decreased 0.2 percent from the previous month, owing mainly to a 6.8 percent decline in travel costs and a 1.6 percent fall in prices of petroleum products, STATEC said.

Separately, the statistical office announced that the inflation projections for this year and next were lifted to 2.2 percent and 1.5 percent, respectively, from 2.1 percent and 1.4 percent previously. The STATEC attributed the upgrade to the smaller-than-expected decline in fuel prices in the third quarter.

The agency expects inflation to increase in the last two months of the year due to the strengthening of positive base effects on energy.

Electricity prices are forecast to fall 15 percent next year, which is significantly bigger than the 9 percent decrease projected earlier. This is due to the state contribution to electricity network usage tariffs, the agency added.

Cheaper gas and Brent prices are expected push energy inflation down to minus 6.3 percent next year. However, services inflation is projected to climb to 2.5 percent from 2.3 percent this year and food inflation is forecast to accelerate to 2.4 percent from 2.0 percent.

Luxembourg's inflation is expected to slow to 1.9 percent in 2027, near the 2 percent target of the European Central Bank, underpinned by government measures and a possible gradual improvement in the economic situation.