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In July, annual harmonized deflation in Lithuania constituted 0.2%

Nijolė Šaltenienė, Statistics Lithuania, 11.08.2015.Print version
Statistics Lithuania informs that in July 2015, average annual inflation calculated based on the harmonized index of consumer prices (HICP), which is methodologically harmonised with those of other EU member states, was negative and stood at minus 0.4%.

Average annual inflation calculated based on the CPI was also negative and stood at minus 0.6%.


Average annual inflation calculated based on the HICP


In July 2015, annual inflation (July 2015, against July 2014) calculated based on the HICP was negative and stood at minus 0.2%; the CPI-based one was also negative and stood at minus 0.5%.

 

Overall monthly (July 2015, against June) decrease in prices for consumer goods and services calculated based on the HICP stood at 0.5% and coincided with the CPI-based one.


Table 1. Rates of change in prices for consumer goods and services calculated based on the HICP, July 2015

COICOP/HICP1 divisions of consumer goods and
services

Relative
share (weight)
in total
consumption
expenditure, ‰

Price growth, drop (-), %

July 2015, against

Average annual
July 2014–2015
July 2013–2014

June 2015

July 2014

Consumption goods and services

1 000.0

–0.5

–0.2

–0.4

Food products and non-alcoholic beverages

217.5

–1.0

–1.6

–0.2

Alcoholic beverages and tobacco products

84.4

0.0

1.1

3.2

Clothing and footwear

66.5

–7.2

0.6

–0.6

Housing, water, electricity, gas and other fuels

120.8

0.3

–2.8

–2.2

Furnishings, household equipment and routine
maintenance

62.8

0.1

1.9

0.6

Health care

63.2

1.1

2.9

2.0

Transport

153.1

0.3

–3.5

–5.4

Communications

27.5

0.0

–0.2

–1.8

Recreation and culture

69.9

–0.3

1.7

1.1

Education

12.3

0.0

1.7

1.5

Hotels, cafes and restaurants

43.4

0.7

4.8

4.2

Miscellaneous goods and services

78.6

0.4

2.6

1.8


___________________________
1 Classification of Individual Consumption by Purpose adapted for the needs of Harmonized Index of Consumer Prices – COICOP/HICP

 

For the calculation of annual and average annual inflation, monthly and other period's price changes, the HICPs calculated based on the 2005 index reference period (2005 = 100) accurate to two decimal places are used. Price indices are published accurate to two decimal places, inflation and price changes – to one decimal place.

 


Table 2. COICOP/HICP classes of consumer goods and services whose rates of change in prices had the biggest impact on the overall price change

COICOP/HICP classes of consumer goods and services

Relative share (weight) in total consumption expenditure, ‰

Price growth, drop (-), %

Impact,%age points

July 2015, against June

Passenger transport by air

4.5

23.3

+0.106

Pharmaceuticals

39.5

1.1

+0.045

Heat energy

22.2

2.0

+0.038

Catering services of restaurants, cafes and similar establishments

25.4

1.2

+0.032

Electric appliances for personal care and other non-electric appliances, articles and products for personal care

20.6

1.1

+0.022

Package holidays

6.3

3.1

+0.020

Clothing

43.4

–7.4

–0.318

Vegetables

21.1

–10.1

–0.239

Footwear

19.8

–7.5

–0.144

Fuels and lubricants

73.9

–0.7

–0.052

Fruit

12.4

–2.5

–0.037

Solid fuel

13.8

–2.8

–0.035

July 2015, against July 2014

Catering services of restaurants, cafes and similar establishments

25.4

5.9

+0.174

Fruit

12.4

11.9

+0.142

Tobacco products

25.4

4.9

+0.134

Pharmaceuticals

39.5

2.8

+0.107

Coffee, tea and cocoa

10.6

7.7

+0.075

Wine

17.4

3.8

+0.066

Fuels and lubricants

73.9

–7.5

–0.515

Solid fuel

13.8

–15.3

–0.223

Milk and milk products, cheese and eggs

39.2

–5.1

–0.203

Beer

19.8

–8.6

–0.171

Vegetables

21.1

–8.2

–0.154

Electricity

17.6

–6.3

–0.110

 

The overall change in consumer prices is influenced not only by the size of the price change for a certain product but also by the relative share of expenditure on that product in the total consumption expenditure.


Differences between the HICP and the CPI

Purpose. The HICP is an instrument for measuring inflation in the EU and making international comparisons, as well as for the compilation of the European index of consumer prices (covering 28 EU member states), Monetary Union index of consumer prices (covering 19 EU member states belonging to the euro area: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain), and the European Economic Area index of consumer prices (covering 28 EU member states, Iceland and Norway). The extent to which a country fulfils the price stability criterion established in Article 140 of the Treaty on the Functioning of the European Union is measured taking into consideration the inflation rate calculated based on the HICP.

 

The CPI is used to measure the inflation rate in the country; it is the key instrument for indexation.


Coverage. The HICP, alongside consumption expenditure incurred by the residents of the country, covers consumption expenditure incurred by non-residents and visitors from abroad within the economic territory of the country. The CPI covers consumption expenditure incurred only by the residents of the country within the economic territory of the country. The HICP does not cover household expenditure on games of chance and financial intermediation services, while the CPI does cover them.

 

Weights. Due to a different coverage of consumption expenditure, weighting systems used for the HICP and CPI compilation differ. This is the primary factor leading to differences in index values.

 

Classification. For the calculation of the CPI, the Classification of Individual Consumption by Purpose (COICOP) is used. The Classification of Individual Consumption by Purpose adapted to the needs of HICPs has been adjusted for the calculation of the HICP.


Concepts

Inflation is a long-term increase in the general price level, resulting in a decrease in the purchasing power of money. Inflation is usually calculated based on the consumer price index and expressed in %.

 

Annual inflation shows the relative change in the average price level in the reporting month and the corresponding month of the previous year.

 

Average annual inflation shows the relative change in the average price level in the last twelve months and the corresponding previous twelve months.

 

Harmonized index of consumer prices – a consumer price index compiled according to a methodology harmonised across the European Union.

 

Consumer price index – a relative indicator reflecting the overall change in prices for consumer goods and services purchased by households to satisfy their consumption needs over a certain period of time.


For more information on the issue, please see the Database of Indicators of Statistics Lithuania and Eurostat's website.






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