Euro Area Belgian Inflation Below Expectations; Additional German Regional Data Stronger; Nudging Up Our Euro Area Tracking ...

Economics Research 30 July 2026 | 11:33AM BST

Euro Area: Belgian Inflation Below Expectations; Additional German Regional Data Stronger; Nudging Up Our Euro Area Tracking Estimates

BOTTOM LINE: Belgian flash HICP inflation came in at 3.5%yoy in July, up from Katya Vashkinskaya | 3.2%yoy in June, below our expectation of 3.7%yoy. We downgrade our core HICP Goldman Sachs International inflation estimate for Belgium to 3.1%yoy from 3.3%yoy previously on weaker core goods and services in the CPI release. Incorporating additional German regional CPI data released since we published the update of our tracking this morning, we bring our estimate of German core HICP inflation back to 2.7%yoy and remain at 2.9%yoy for headline inflation, but nudge it up as well. Taking the Belgian national and additional German regional data into account, we upgrade our Euro area headline inflation forecast for July to 2.89%yoy from 2.88%yoy previously. We also revise up our Euro area core inflation forecast by 1bp to 2.45%yoy.

For the exclusive use of KEY NUMBERS:

Belgian Headline HICP Inflation (Flash, July): 3.5%yoy, GS: 3.7%yoy, last (June): 3.2%yoy.

1. Belgian flash HICP inflation came in at 3.5%yoy in July, up from 3.2%yoy in June, below our expectation of 3.7%yoy. While gas prices surprised our forecast to the downside, electricity prices increased broadly as expected, and motor fuels increased more than we penciled in, so we nudge our energy inflation forecast down somewhat. At the same time, core services look somewhat weaker than we expected, driven by a smaller increase in air fares (which rose by 24%mom nsa). Core goods also appear somewhat weaker, with garments in the CPI print rising less than

fce07ef8421611dd87ec0014c24035ec we expected (although CPI to HICP translation there is not perfect). Core CPI inflation (headline excluding non-processed food and energy products) stood at 3.13%yoy (vs. 3.04%yoy in June). We thus downgrade our core HICP inflation estimate for Belgium to 3.1%yoy from 3.3%yoy previously.

2. Since we published the update of our tracking post the preliminary German regional data release this morning, more data were released, taking the total weight from 68% to 76% of the economy. Incorporating the additional data points to firmer core pressures, via both core goods and core services (compared to the previous data available). We thus bring our estimate of German core HICP inflation back to 2.7%yoy, close to our initial forecast (from a strong 2.6% we downgraded to this morning), and remain at 2.9%yoy for headline inflation, but nudge it up as well.

3. Taking the Belgian national and additional German regional data into account, we upgrade our Euro area headline inflation forecast for July to 2.89%yoy from 2.88%yoy previously. We also revise up our Euro area core inflation forecast by 1bp

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to 2.45%yoy. We will update our Euro area inflation forecast after the German nationwide data are published later today.

Exhibit 1: July HICP Tracking Estimates

For the exclusive use of Source: Goldman Sachs Global Investment Research, Haver Analytics

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