Today the 9th issue of Gentse Economische Inzichten (Ghent University Economic Insights) has been published. Gentse Economische Inzichten is a forum for the broad societal dissemination of research findings and policy recommendations by researchers of the Department of Economics of Ghent University. Given that this forum focusses on the Flemish community, the Gentse Economische Inzichten are published in Dutch.

This issue analyzes the evolution of the energy bills (electricity and heating) of 930,000 Belgian households over the past couple of years, and the consequences on the consumer price index (CPI).

These are the most important findings:

1. According to the official statistics that are used to calculate the consumer price index, the energy bill (including government support) was in 2022 on average 81% more expensive than in 2018. However, bank transaction data from 930,000 households reveal that the energy bill was on average only 17% more expensive. For the median household, this was even only 1%. Almost half of households (47%) paid less for energy in the so-called “crisis year” 2022 than in 2021.
2. This does not mean that none of the households were seriously affected by rising energy prices. For example, about 5% of families paid in 2022 (annually) at least €1500 more than in 2021, some even €3000‐ €4000 more. Nevertheless, such extreme increases were rare exceptions.
3. There are three reasons for the difference between the official data and reality. First, the basket of the CPI only includes prices of new (fixed or variable) energy contracts, while the majority of the households had (has) a contract with a fixed price that was set before the energy crisis. Second, the calculations of the CPI assume that the volume of energy consumption has not changed since 2018, which contrasts with a decline in practice. Finally, there is a difference because the impact of several government support measures to lower energy bills has not fully been taken into account when calculating the CPI; that is, the impact of these measures on the CPI has been spread over time.
4. As a result of the measurement error, there has been an overestimation of the consumer price index. For example, the CPI was in 2022 on average 3.3% overestimated. The health index, which is in Belgium used for automatic wage indexation was even 3.5% overestimated (respectively 4.4% and 4.7% based on the median bill). As a result, wages have increased much more than the true loss in purchasing power.
5. Exactly the opposite will happen in the near future; that is, there will be a considerable underestimation of the true inflation rate, while wages will increase much less than the true loss in purchasing power.
6. The authors recommend to use the “true” energy bills to calculate the CPI in the future. This would solve several fundamental problems.

Read the full ninth issue of Gentse Economische Inzichten