Harmonised Index of Consumer Prices (HICP) is used to compare inflation rates
across the European Union. It has been
used by the European Central Bank (ECB) as the measure of price stability
across the euro area since January 1999.
Indeed, the HICP was developed in the EU for the purpose of assessing
whether prospective members of the European Monetary Union would meet the
inflation convergence criterion, and later acting as the measure of inflation
used by the ECB to assess price stability in the euro area. The main requirement was for a measure that
could be used to make reliable comparisons of inflation rates across EU Member
States. Such comparisons are not
possible using national consumer price indices due to differences in index coverage
coverage of the HICP is based on an international classification system, COICOP
(Classification of Individual Consumption by Purpose), for comparability
purposes at EU level. Hence, the calculated
indices are aggregated into COICOP codes for consistency. The HICP indices are compiled under the European
Framework Regulation (EC) No. 2494/95 of
23 October 1995.
for the HICP is compiled from price readings which are gathered every month
from various outlets across Malta and Gozo, by a team of price collectors. Besides this, prices for certain services are
also collected by means of mail surveys, administrative data sources, telephone
surveys, and online sources. The Retail Price
Index (consumer price index used at a national level) captures private
households only whereas the HICP covers private households, institutional
households (such as retirement homes) and foreign visitors to Malta. The differences in the underlying weighting
schemes between the RPI and the HICP account significantly for the disparities
in their results on a monthly basis.
HICP is being published with 2015 as its base year, which was updated in agreement
with the Commission Regulation 2015/2010.
As already indicated, the HICP is a chain index that is subject to
review on an annual basis. It should be
noted that the re-basing operation was conducted after rounding all past
indices to one decimal place as required by Eurostat.
HICP is produced according to rules specified in a series of European Union
Regulations that were developed by Eurostat in conjunction with the EU Member
States. When aggregating the individual
country indices for publication, Eurostat uses weights that are based on each
country’s share of each relative bloc’s total household final consumption
expenditure. Note that the HICP
weighting scheme is updated annually in accordance with Commission Regulation
(EU) No. 1114/2010, while seasonal items are treated in accordance to
Commission Regulation (EC) No. 330/2009.
measures produced are the inflation rate, percentage change on a monthly and
annual basis, impact on inflation, and twelve-month moving average rate.
and reliability of data
on the accuracy and reliability of data can be viewed in a dedicated ESMS
metadata report available on the NSO metadata website.
and punctuality of data
HICP is published by the NSO and Eurostat on a monthly basis. HICP flash estimates data are also
transmitted to Eurostat on a monthly basis.
Eurostat also publishes aggregate HICP indices for the euro area
countries and the European Union. Data
pertaining to a particular month is published in the subsequent month. This is also accessible on the NSO website
and each release is published on the pre-established date, as scheduled in the Advance Release Calendar, which can be viewed also on the
and clarity of data
data can be accessed from Eurostat’s database.
A metadata report is sent to Eurostat every few years. This report is also produced at a national
level and is made available on the NSO metadata website.
and comparability/consistency of data
HICP largely follows National Accounts concepts of what constitutes household
consumption in determining the index scope, and mainly uses National Accounts
data sources to weight the items in the basket.
This makes for increased coherence between the HICP commodity and
population coverage and National Accounts principles. As a result, HICP weights are therefore based
on the final consumption expenditure of all individuals in the domestic
territory, including spending by private households, institutional households
and foreign visitors. National Accounts
principles have also influenced the classification of goods and services within
HICP data is fully
comparable over time. This data is
available as from 1996 onwards. In order
to improve reliability and comparability, there have been several improvements
in the HICP methodology. Although these
changes may have introduced breaks in series, back calculations using the new
methodology were performed whenever all the necessary data was available. HICP data can also be compared with those of
other countries. The last revision was
held in 2012.