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Harmonized average annual inflation in Lithuania stood at 0.3% in October

Nijolė Šaltenienė, Statistics Lithuania, 12.11.2014.Print version
Statistics Lithuania informs that in October 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 0.3%.

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


Average annual inflation calculated based on the HICP

In October 2014, annual inflation (October 2014, against October 2013) calculated based on the HICP stood at 0.3% and was by 0.2%age points higher than the CPI-based one.

 

Overall monthly (October 2014, against September) change in prices for consumer goods and services calculated based on the HICP stood at 0.1% and coincided with that calculated based on the CPI.


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

COICOP/HICP1 divisions of consumer goods and services

Relative share (weight) in total consumption expenditure, ‰

Price growth, drop (-), %

October 2014, against

Average annual
October 2013–2014
October 2012–2013

September 2014

October 2013

Consumption goods and services

1 000.0

0.1

0.3

0.3

Food products and non-alcoholic beverages

236.9

–0.6

0.6

0.8

Alcoholic beverages and tobacco products

85.6

0.4

4.3

3.5

Clothing and footwear

67.1

4.3

–0.6

–0.4

Housing, water, electricity, gas and other fuels

123.4

1.4

–0.3

–0.6

Furnishings, household equipment and routine maintenance

61.9

0.1

–0.1

0.4

Health care

53.5

–0.5

1.5

1.1

Transport

147.3

–1.1

–3.1

–1.4

Communications

25.6

–0.2

–4.1

–6.8

Recreation and culture

68.8

–0.9

0.2

0.7

Education

12.1

0.2

1.0

1.1

Hotels, cafés and restaurants

51.9

–0.2

3.7

2.9

Miscellaneous goods and services

65.9

0.3

1.3

0.4

_________________________

1 Classification of Individual Consumption by Purpose (COICOP) adapted for the needs of Harmonized Index of Consumer Prices (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, percentage points

October 2014, against September

 

 

 

 

Heat energy

27.2

8.2

+0.184

Clothing

44.1

3.2

+0.134

Footwear

19.7

6.7

+0.128

Beer

20.7

1.6

+0.033

Other financial services not elsewhere classified

8.9

3.0

+0.027

Tobacco products

27.6

0.7

+0.019

Fuels and lubricants

72.4

 

–1.5

 

–0.106

Passenger transport by air

3.8

–15.5

–0.059

Package holidays

7.2

–7.1

–0.054

Sugar, jam, honey, chocolate and

confectionery

18.4

–1.5

–0.028

Accommodation services

8.4

–2.8

–0.025

Fruit

13.7

–1.4

–0.023

October 2014, against October 2013

 

 

 

 

Tobacco products

27.6

6.6

+0.200

Fruit

13.7

12.9

+0.187

Restaurants, cafés and the like

34.5

5.0

+0.176

Solid fuel

13.2

11.1

+0.143

Beer

20.7

6.0

+0.116

Coffee, tea, cocoa

9.2

9.5

+0.089

 

 

 

 

Fuels and lubricants

72.4

–5.3

–0.376

Heat energy

27.2

–10.1

–0.274

Gas

10.2

–11.9

–0.112

Telephone and telefax services

23.2

–4.0

–0.104

Electricity

19.1

–5.4

–0.102

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

7.2

–10.5

–0.070


The overall change in consumer prices is influenced not only by the size of price change of 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 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.

 

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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