Life gets cheaper

9th January 2009, Comments 0 comments

Prices are set to fall for the first time since 1948.

Belgium's Federal Planning Office is predicting that there will be negative inflation or deflation in June and July.

The Planning Office is the Federal Government's economic think tank. It believes that inflation will reach -0.07% in June and -0.19% in July.

It will be a novel experience for most Belgians who are only used to prices going up.

The negative inflation is due to falling petrol, diesel and heating fuel prices.

A barrel of crude oil cost 147 dollars on the international market in July of last year. Today the price is barely 50 dollars.

Gas and electricity are set to become less expensive too. A number of energy suppliers have already announced lower prices. Foreign travel too is going to be cheaper as airline companies benefit from lower kerosene prices.

The Federal Planning Office does not expect the index that triggers a rise in wages and benefits to rise more than 2%, which would mean higher salaries and benefits.

In 2008 the index rose by over 6% triggering three wage and benefit increases.

The Planning Office believes that negative inflation will only be a temporary phenomenon and that by December annual inflation will stand at 1.76%.


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