Higher inflation forecast for 2026
The Planning Bureau expects average inflation of 3.2 per cent this year, according to forecasts published on Tuesday. This is a marked increase on earlier projections: 2.6 per cent in March and 1.9 per cent in February.
Inflation remained relatively low in the first quarter, standing at 1.65 per cent in March. However, it is expected to rise above 3 per cent from April and exceed 4 per cent from October. The peak is forecast for January 2027, at 4.43 per cent, with inflation not dropping below 4 per cent again until March of that year. For 2027 as a whole, average inflation is projected at 2.9 per cent.
Energy prices driving the increase
The upward revision is largely attributed to the war in the Middle East, which has pushed up energy prices and is now feeding through into the broader cost of living.
For its 2026 outlook, the Planning Bureau assumes an average oil price of 90 USD per barrel, a natural gas price of 46 euros per MWh, and an electricity price of 101 euros per MWh.
Pivot index
The higher inflation outlook also affects the pivot index, which determines when public sector wages and benefits are adjusted. The Planning Bureau now expects the index to be breached twice in 2026, in July and December, and once in 2027, in December.
When the pivot index is exceeded, benefits and public sector wages increase three months later. This would mean adjustments in October 2026 and March 2027.
© PHOTO BELPRESS
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