Due to the persistently high inflation, the pivotal index will not be exceeded again in June 2022, but already in January. Social benefits and the wages of government employees will then be increased by 2 percent for the second time in six months.
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That is what the Planning Bureau predicts on Tuesday. If the forecast comes true, it will be the second indexation of benefits and civil servants’ wages in six months. Because in August the pivotal index was already exceeded. This exceedance came a few months earlier than expected due to a rise in inflation.
The month after such an overrun, social benefits and pensions are increased by 2 percent in order to adjust them to the increased longevity. That would be February. Another month later, in March 2022, the salaries of government employees will follow. For those who work in the private sector, the indexation takes place according to the sector agreements. In practice, this means that indexation takes place once a year, in January of the following year.
The adjustment at the beginning of 2022 would then also be the last, according to the planning office. According to current expectations, the pivotal index should not be exceeded again for the rest of the year.
High inflation
The pivot index is linked to inflation. It has been very high for months, mainly driven by high energy prices. In September, inflation in Belgium was 2.73 percent, the highest level since February 2017.
The Planning Bureau now expects inflation to be 2.1 percent this year and 2.8 percent in 2022. A month ago, it was 1.9 and 2.1 percent respectively.
Inflation is also clearly rising elsewhere in Europe. German inflation rose to 4.1 percent in September, the highest figure in 28 years.
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