Due to persistently high inflation, the pivotal index has been exceeded for the second time in five months. That means social benefits, pensions and civil servants’ wages will rise again by 2 percent in the coming months. This is according to figures from the statistical office Statbel.
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Why are prices rising? Our financial expert Paul D’Hoore explains:
Inflation stood at 5.71 percent in December. That is slightly higher than in November, when consumer prices were on average 5.64 percent higher than a year earlier. It is again the highest level since July 2008.
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Inflation has been driven by high energy prices for months. Natural gas, for example, is now almost twice as expensive (+97 percent) as in December last year. Electricity has become 44 percent more expensive, domestic heating oil a third. Diesel and petrol cost more than 22 percent more than in December 2020. The largest annual price decreases are for TV equipment (-11.5 percent), software (-8.2 products), smartphones (-5 percent) and cocoa (-5.2 percent). Inflation without energy products was 2.35 percent in December, compared to 1.88 percent in November.
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The pivot index was again exceeded. As a result, social benefits in January 2022 and government employee wages in February 2022 will be adjusted by 2 percent in line with the increased longevity.
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The Planning Bureau had predicted the second exceedance since August. In fact, it expects the pivotal index to be surpassed again in August 2022, after which social benefits and wages of government employees would be indexed for the third time in 13 months.
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Wage indexation
Due to the high inflation, a record number of employees will receive more wages at the beginning of next year, calculated HR services company SD Worx. The extent and timing of wage indexation in Belgium depend on the joint committee in which one is employed.
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The largest group servants – more than 400,000 from the pc 200 which includes IT and consulting firms or call centers – will see their pay rise by 3.58 percent in January. That is the highest indexation in ten years. In 2021, indexation was limited to 0.95 percent.
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Also in the horeca (+3.219 percent for 140,000 employees), nutrition (+3.22 percent for 90,000 employees), trade in foodstuffs including butcher shops (+3.58 percent for 33,000 employees) and in the Agriculture (+3.22 percent for about 35,000 employees) wages will rise in January.
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Other sectors where wage indexation will take place next month are the road transport on behalf of third parties (+3.21 percent for about 90,000 employees), the international logistics (+3.95 percent for about 50,000 employees), trade in fuels (+3.2189 percent for about 2,000 employees), the sector of building management and real estate agents (+3.58 percent for about 12,000 employees), the insurers (+3.94541 percent) and intermediaries in banking and investment services (+3.58 percent).
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Also construction suppliers see wages rise in January. This is the case, for example, for electricians (+3.95 percent for almost 25,000 employees) and tile makers (+3.94 percent).
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For most of these sectors, the adjustment is made only once a year, each time in January. Other sectors adjust wages more quickly to rising life spans.
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This is the case, for example, for the construction industry (pc 124 with 140,000 employees), which indexes on a quarterly basis. In January, wages rose by 1.41747 percent. Also the wood industry wages will increase in January, among other things, this time by 1.41 percent. The joint committees working with paper and cardboard, grouping some 10,000 workers, will see wages rise 2.93 percent in January. The cleaning sector (pc 121 with about 40,000 employees) provides for wage indexation twice a year: in July and January (+2.76 percent). Employees from the financial sector of banks (pc 310) in brokerage firms (pc 309) will receive an indexation every two months: for 48,000 employees this means an increase of 1.3 percent and 1.3028 percent respectively.
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Several other sectors index at a fixed percentage (+1 or 2 percent) after exceeding their pivot index. In January this is the case, among other things, for the distribution sector, with more than 200,000 employees, the textile sector, from brickyards, from health institutions and services …
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