Annual inflation in Luxembourg stood at 2.2%

In August, annual inflation in Luxembourg stood at 2.2 per cent for the third consecutive month. Energy prices remain the main factor, being 5.8 per cent higher than in August 2025. However, on a month-on-month basis, the energy sector showed an overall decline of 2 per cent. This trend was the result of government measures adopted within the framework of the Tripartite Coordination Commission. Thanks to their implementation, electricity and gas tariffs fell by 13.9 per cent and 14.3 per cent respectively over the month. However, this effect was partly offset by rising motor fuel prices: diesel rose by 12.3 per cent over the month, whilst petrol rose by 0.8 per cent. The price of fuel oil also rose by 5.2 per cent, despite a previously agreed reduction of 15 cents per cubic metre.

The end of the summer sales season led to a 17.2 per cent rise in prices for clothing and footwear compared with July. This contributed to an overall increase in prices for non-energy industrial goods of 3.1 per cent over the month and 1.1 per cent year-on-year. The food sector is also showing growth: food prices rose by 1.6 per cent year-on-year. The most significant price rises were seen in vegetables (up 12.5 per cent), frozen fruit (up 6.3 per cent) and chocolate (up 5.6 per cent). At the same time, fruit, vegetable oils and citrus fruits are cheaper than a year ago.

In the services sector, the rate of price inflation rose from 2.4 per cent in July to 2.6 per cent in August. According to the National Institute of Statistics and Economic Research (Statec), the main factor behind this was a 1.8 per cent rise in fees for nurseries and after-school care. 

Persistent inflationary pressure has a direct impact on the automatic wage indexation mechanism, which adjusts household incomes in line with the rising cost of living. The average index value for the half-year rose by almost five points, reaching 1,054.27. According to official forecasts, the threshold of 1,064.75 points will be exceeded in the second quarter of 2027, which will automatically trigger the next round of pay rises in the country.