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Harmonised annual inflation in Lithuania constituted 0.4% in June

Nadiežda Alejeva, Statistics Lithuania, 10.07.2014.Print version
Statistics Lithuania informs that in June 2014 average annual inflation calculated based on the harmonised index of consumer prices (HICP), which is methodologically harmonised with those of other EU Member States, stood at 0.4%.

The value of average annual inflation calculated based on the HICP was by 0.1 percentage points higher than that calculated based on the consumer price index (CPI).


Average annual inflation calculated based on the HICP

HICP-based annual (June 2014, against June 2013) inflation stood at 0.3% and was by 0.1 percentage points higher than the CPI-based one.

 

There was almost no monthly (June 2014, against May) change in prices for consumer goods and services calculated based on either the HICP or the CPI.


Table 1. Rates of change in prices for consumer goods and services calculated based on the HICP, June 2014

COICOP/HICP divisions of consumer goods and services

Relative share (weight) in total consumption expenditure, ‰

Price growth, drop (–), %

June 2014, against

average annual
June 2013–2014
June 2012–2013

May 2014

June 2013

Consumer goods and services

1 000.0

0.0

0.3

0.4

Food products and non-alcoholic beverages

236.9

–0.2

0.5

1.0

Alcoholic beverages and tobacco products

85.6

–0.4

3.7

2.8

Clothing and footwear

67.1

–1.2

0.8

–0.4

Housing, water, electricity, gas and other fuels

123.4

–0.5

–0.8

–0.6

Furnishings, household equipment and routine maintenance of the house

61.9

0.2

0.0

0.6

Health care

53.5

0.6

1.0

1.1

Transport

147.3

0.3

0.2

–1.1

Communications

25.6

0.3

–8.3

–7.2

Recreation and culture

68.8

0.7

–0.1

1.2

Education

12.1

0.0

1.2

1.7

Hotels, cafes and restaurants

51.9

0.6

1.7

2.9

Miscellaneous goods and services

65.9

0.5

–0.2

0.6

 

For the calculation of annual and average annual inflation, monthly price changes and price changes for other periods, the HICPs calculated based on the 2005 index base 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. Biggest impact on the overall consumer price change by COICOP/HICP class of consumer goods and services

COICOP/HICP classes of consumer goods and services

Relative share (weight) in total consumption expenditure, ‰

Price growth, drop (–), %

Impact, percentage points

June 2014, against May

 

 

 

 

Package holidays

7.2

7.8

+0.054

Passenger transport by air

3.8

14.0

+0.049

Fruit

13.7

2.6

+0.040

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

 

17.5

 

1.8

 

+0.030

Refuse collection

4.6

5.5

+0.025

Pharmaceuticals

33.7

0.6

+0.021

 

 

 

 

Heat energy

27.2

–4.5

–0.110

Footwear 

19.7

–3.2

–0.064

Beer

20.7

–1.7

–0.038

Vegetables 

20.1

–1.6

–0.034

Fuels and lubricants

Clothing

72.4

44.1

–0.3

–0.4

–0.021

–0.018

June 2014, against June 2013 

 

 

 

 

Solid fuel

13.2

23.7

+0.274

Milk and dairy products, cheese, eggs

42.0

6.2

+0.220

Tobacco products

27.6

4.3

+0.177

Water supply

7.0

15.2

+0.092

Beer

20.7

4.1

+0.087

Restaurants, cafes and similar establishments

34.5

2.1

+0.083

 

 

 

 

 

 

 

 

Heat energy

27.2

–18.4

–0.582

Telephone and telefax services

23.2

–8.4

–0.248

Electricity

19.1

–5.4

–0.102

Coffee, tea, cocoa

9.2

–6.7

–0.073

Equipment for the reception, recording and reproduction of sound and pictures       

 

7.2

 

–9.5

 

–0.051

Cars

21.7

–2.4

–0.049


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 (weight) 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 18 EU member states belonging to the euro area: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, 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 decrease in the purchasing power of a currency unit, which manifests itself in a long-term growth in the general average price level.

 

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.

 

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

 

Consumer price index is 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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