The explanation for this year’s decline lies in the fact that automatic wage indexation, whereby wages are adjusted in line with inflation, is delayed for many employees. Inflation has been very high in Belgium for months, but a lot of wage earners -more than one in three according to the National Bank- see their wages adjusted only once a year. The shock of energy prices may have an impact on the purchasing power of households, at least temporarily, but people are better protected here than in other countries, according to the National Bank.
Due to high inflation, many households are faced with major uncertainties. “This is also reflected in consumption, which is temporarily held back by the slow decline in purchasing power, but supported by the decline in the savings rate and the mechanism of indexation of wages and social benefits,” quotes ‘La Libre’ from the report of the National Bank.