Luxembourg’s national consumer price index saw a notable rise to 1.94% in January 2025, up from 1.04% in December 2024 and 0.8% in November 2024, according to Statec, the national statistics agency. This increase in inflation was primarily attributed to a rise in energy prices, following the cessation of government price shields that had previously been in place.

The rebound in energy prices, in particular, played a key role in driving this change, Statec said in a on Wednesday 5 February 2025. Electricity prices surged by 43.9% in January 2025, after experiencing a 13.6% decline in December 2024. The January followed the partial removal of the energy price shield, which had been introduced in September 2022. Compared to the initial shield implementation, electricity prices rose by 24.6%. Additionally, petroleum products saw an overall increase of 14.5% from December, which was primarily caused by the ending of certain government subsidies and the introduction of a CO2 tax in January 2025. This tax contributed to a sharp 28% rise in the price of heating oil, following the termination of a €0.15 per litre government discount. Natural gas prices also experienced a significant increase, rising by 36%, with the removal of state coverage for network fees accounting for 34.5% of this increase. Motorists were affected by price increases as well, paying 3.8% more for petrol and 4.1% more for diesel. Compared to January 2024, petroleum prices were up by 4.4%.

Food prices saw a more modest rise in January, increasing by 1.1% from December. Among the biggest contributors to this increase were fresh fish (up 9.8%), fresh vegetables (up 4.0%) and meat (up 1.2%). On the other hand, there were notable price declines in items such as rice (down 2.5%), sauces and condiments (down 1.2%), and skim and semi-skimmed milk (down 1.1%). Year-on-year, food prices were up by just 0.5% compared to January 2024.

Other categories also saw notable price increases in January. Municipal taxes, including water supply (up 4.4%) and household waste collection (up 0.5%), rose, as did restaurant prices (up 0.5%) and daycare and childcare services (up 3.5%). However, seasonal factors led to a deflationary impact in certain sectors. For instance, package holidays dropped by 19.5%, and flight tickets saw a decrease of 12.7% compared to December. Additionally, medical and dental services experienced reductions, with medical services falling by 2.8% and dental services dropping by 4.1%, partly due to the public health insurer’s introduction of a new billing key letter. The winter sales had a significant effect on prices in the clothing and footwear category, which dropped by 13.3% compared to December. However, these prices were still 0.6% higher than they had been in January 2024.

For the calculation of the salary index scale, the law allows for the neutralisation of the CO2 tax, which was levied on energy products, as well as increases in taxes and excise duties on tobacco products. This led to a new connection coefficient of 8.21659, linking the consumer price index (base 100 in 2015) to the index (base 100 as of 1 January 1948). Based on the January 2025 reference, the six-month moving average of the linked index rose from 1010.02 to 1010.80 points. The automatic wage indexation will be triggered when the linked index reaches 1013.46 points.

In a separate , Statec released its inflation forecast. After recording an annual inflation rate of 2.1% in 2024, Statec is projecting inflation of 2.2% for 2025 and 1.8% for 2026. This forecast suggests that the next wage indexations are scheduled for the and the second quarter of 2026.