Belgian's purchasing power has not dwindled
Study proves that purchasing power is about the same as 25 years ago despite inflation being the highest since 1985.30 May 2008
BELGIUM - Annual inflation rose this month to 5.21 percent. This is the highest level of inflation since May 1985 when inflation was at 5.33 percent.
Still, according to a study by the Institute of Sustainable Development, Belgians’ purchasing power has not dwindled.
Petrol and trips abroad became more expensive in April. Medicines and the purchase of motor vehicles became somewhat cheaper.
The record high inflation rate is a European-wide phenomenon, according to the Belgian Federal government Economy department.
Purchasing power has not diminished
The Institute for Sustainable Development investigated what we spent on 13 standard products in 1983, in 1988 and now.
Not surprisingly, everything has become more expensive. On the other hand, our salaries have also risen. On average, people in 1983 earned EUR 4.92/hour. Now, in 2008, the average wage is EUR 10.63.
So despite the fact that petrol prices have reached all time highs in recent months, Belgians are working less hours now to buy 40 litres of high octane gasoline as compared to 25 years ago.
Twenty-five years ago, Belgians had to work on average 6 hours and 15 minutes to buy 40 litres of high octane gasoline. Today, Belgians only have to work 5 hours and 25 minutes to buy a comparable 40 litres of fuel for cars.
Other standard products such as eggs, milk, butter, apples are now also relatively cheaper than 25 years ago.
Only a few products have actually become more expensive. A kilogram of potatoes for example takes five minutes of work to pay for- two minutes longer than in 1983.
"The impression that our purchasing power is dwindling is partly due to the relatively recent appearance of new products on the market using high tech applications like GPS, mobile phones, blackberries, and so forth," says economist Philippe Defeyt, president of the Institute for Sustainable Development.
People have also become more mobile, and want to travel more, which also gives the impression that the cost of living has gone up - and it has because people are buying and doing things they used to not think they needed.
[flandersnews.be / Expatica]