The central index will be exceeded twice this year, the Planning Bureau expects. This means that civil servants’ wages and benefits will rise again.
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The pivotal index will be exceeded twice this year, in October and December. That is what the Planning Bureau predicts on Tuesday. Such an excess always leads to an indexation of civil servants’ wages and social benefits.
If the forecast comes true, the pivot index will be exceeded a total of five times this year. Earlier this year, this already happened in February, April and July. The pivotal index was also exceeded in December 2021.
If the pivotal index is exceeded, social benefits are increased by 2 percent one month later. The officials’ wages will follow a month later.
The fact that the central index is exceeded so often has to do with the sky-high inflation – the extent to which consumer prices rise. It stood at 9.94 percent in July, the highest level in 46 years. The Planning Bureau expects inflation to rise above 10 percent in September, and that cape would also be rounded in October and December. For the full year, inflation would be 9.4 percent. In 2023, inflation is expected to cool to 6.5 percent. That remains well above the level of about 2 percent that the European Central Bank (ECB) is aiming for.
It is not only civil servants’ wages that go up with inflation (via the pivot index). High inflation also means that private sector wages are rising. However, this happens at a different pace in each sector. For some sectors this happens monthly, for others once a year. But also, for example, holiday pay, end-of-year and other premiums and a whole range of supplementary pension plans increase in line with inflation.
The Planning Bureau also expects two more exceedances to follow in 2023. That would be the case in February and July.