Consumer price indices: final data

Transcription

1 14 December 2015 Consumer price indices: final data November 2015 In November 2015, te Italian consumer price index for te wole nation (NIC) declined by 0.4% compared wit te previous mont and rose by 0.1 wit respect to November 2014, down from 0.3 in October Te flas estimate was confirmed. Te slowdown of te inflation was mainly caused by te deceleration of te annual growt of prices of Services related to recreation, including repair and personal care (+0.6%, from +1.4% in te previous mont), due in particular to Restaurants and otels (+0.9%, from +2.1% in October); also prices of Unprocessed food (+3.2%, from +4.1% in October 2015) contributed to te slowdown; tese dynamics were partially balanced by te reduction of te annual decrease of prices of Non-regulated energy products (-11.2%, from -12.7% in October 2015). Excluding energy and unprocessed food, core inflation was +0.7%, down from +0.8 registered in te previous mont; excluding energy, te inflation was +0.8 (0.2 percentage points lower tan tat of October 2015). Te decrease on montly basis of All items index was mainly due to te decline of prices of Services related to recreation, including repair and personal care (-1.6%) and in particular to Restaurants and otels (-2.2%) and to te decline of prices of Services related to transport (-1.2%), partially off-set by te montly increase of prices of Unprocessed food (+0.7%). Te annual rate of cange of prices of Goods was -0.2% (from -0.4% observed in October 2015) and te annual rate of cange of prices of Services was +0.6% (down from +1.0% in te previous mont). As consequence, te inflationary gap between Services and Goods decreased by 0.6 percentage points wit respect to October Prices of Grocery and unprocessed food increased by 0.3% on montly basis and by 1.3% on annual basis (down from 1.5% in te previous mont). In November 2015 te Italian armonized index of consumer prices (HICP) decreased by 0.4 compared wit te previous mont and rose by 0.2% wit respect to November 2014 (down from +0.3% registered in October 2015). Te flas estimate was 0.1. Core inflation measured by Italian HICP was +0.7%, down from +1.0% in October 2015; also excluding energy, food, alcool and tobacco, te inflation was +0.7% (down from +0.9 in te previous mont). Excluding energy, te inflation decreased to 0.8% (0.5 percentage points lower tan in October 2015). In November 2015, te Italian armonized index of consumer prices at constant tax rates (HICP-CT) declined by 0.4% compared wit October 2015 and rose by 0.1% wit respect to November 2014 (0.1 lower tan HICP). Terefore, te difference between HICP and HICP-CT in terms of growt rate on annual basis wic incorporates te effects of canges in indirect taxes, occurred in te last twelve monts was positive and equal to 0.1 percentage points: it as be noted tat tis difference represents te upper limit of te impact of canges in indirect taxes occurred in te last twelve monts on HICP, assuming teir full and instantaneous pass-troug on prices paid by consumers. ITALIAN CONSUMER PRICE INDICES. NOVEMBER 2015 INDICES Nov-15 Nov-15 November 2015 Oct-15 Nov-14 Italian consumer price index for te wole nation (NIC) (a) Italian armonized index of consumer prices (HICP) (b) (a) Reference base year 2010=100; (b) reference base year 2005=100. 1

2 TABLE 1. ITALIAN CONSUMER PRICE INDEX FOR THE WHOLE NATION (NIC), BY COICOP DIVISION. NOVEMBER 2015, weigts, indices and percentage canges (base 2010=100) Divisions Weigts Indices Nov-15 Nov-15 Oct-15 Nov-14 Oct-15 Nov-14 Oct-14 Oct-14 Food and non-alcoolic beverages 165, Alcoolic beverages, tobacco 32, Cloting and footwear 70, Housing, water, electricity, gas and oter fuels 115, Furnisings, ouseold equipment and routine ouseold maintenance 76, Healt 84, Transport 138, Communication 25, Recreation and culture 78, Education 12, Restaurants and otels 111, Miscellaneous goods and services 89, ALL ITEMS 1,000, TABLE 2. ITALIAN CONSUMER PRICE INDEX FOR THE WHOLE NATION (NIC), BY TYPE OF PRODUCTS. NOVEMBER 2015, weigts, indices and percentage canges (base 2010=100) Product typologies Weigts Indices Nov-15 Nov-15 Oct-15 Nov-14 Oct-15 Nov-14 Oct-14 Oct-14 Food including alcool: 176, Processed food including alcool 107, Unprocessed food 68, Energy: 93, Regulated energy products 46, Non-regulated energy products 46, Tobacco 21, Non energy industrial goods: 244, Durable goods 73, Non-durable goods 70, Semi-durable goods 100, Goods 535, Services related to ousing 80, Services related to communication 21, Services related to recreation, including repair and personal care 172, Services related to transport 79, Services - miscellaneous 111, Services 464, ALL ITEMS 1,000, All items excluding energy and unprocessed food (Core inflation) 837, All items excluding energy, food, alcool and tobacco 708, All items excluding energy 906, Grocery and unprocessed food 199,

3 TABLE 3. ITALIAN HARMONIZED INDEX OF CONSUMER PRICES (HICP), BY COICOP DIVISION. NOVEMBER 2015, weigts, indices and percentage canges (base 2005=100) Divisions Weigts Indices Nov-15 Nov-15 Oct-15 Nov-14 Oct-15 Nov-14 Oct-14 Oct-14 Food and non-alcoolic beverages 175, Alcoolic beverages, tobacco 34, Cloting and footwear 81, Housing, water, electricity, gas and oter fuels 123, Furnisings, ouseold equipment and routine ouseold maintenance 81, Healt 40, Transport 146, Communication 27, Recreation and culture 62, Education 12, Restaurants and otels 118, Miscellaneous goods and services 96, ALL ITEMS 1,000, All items at constant tax rates 1,000, TABLE 4. ITALIAN HARMONIZED INDEX OF CONSUMER PRICES (HICP), BY SPECIAL AGGREGATES. NOVEMBER 2015, weigts, indices and percentage canges (base 2005=100) Special aggregates Weigts Indices Nov-15 Nov-15 Oct-15 Nov-14 Oct-15 Nov-14 Oct-14 Oct-14 Food, alcool and tobacco: 210, Processed food (including alcool and tobacco) 119, Unprocessed food 91, Energy: 99, Electricity, gas, solid fuels and eat energy 53, Liquid fuels and fuels and lubricants for personal transport equipment 46, Non-energy industrial goods: 254, Durables 73, Non-durables 67, Semi-durables 113, Goods 564, Services related to ousing 85, Services related to communication 27, Services related to recreation, including repairs and personal care 161, Services related to transport 83, Services - miscellaneous 77, Services 435, ALL ITEMS 1,000, All items excluding energy and unprocessed food (Core inflation) 809, All items excluding energy, food, alcool and tobacco 690, All items excluding energy 900,

4 TABLE 5. REVISIONS OF CONSUMER PRICE INDICES 1. NOVEMBER 2015, indices and percentage canges Italian consumer price index for te wole nation (NIC) (a) Italian armonized index of consumer prices (HICP) (b) (a) Reference base year 2010=100; (b) reference base year 2005=100. Flas estimates Final data INDICES RATES OF CHANGE% INDICES RATES OF CHANGE % November Nov-15 Nov-15 November Nov-15 Nov Oct-15 Nov Oct-15 Nov Metodological note Te Consumer Price Index for te wole nation (NIC) is based on te consumption of te entire present population. Te Harmonised index of Consumer Prices (HICP), calculated according to te EU regulations in force, is used for te comparison of inflation between Member States and as a key indicator for te monetary policy of te European Central Bank. Consumer price indices are calculated using a cained Laspeyres formula, in wic te basket of products and te weigting system are updated annually. Montly indices for te current year are calculated wit reference to December of te previous year (calculation base) and subsequently cained over te period cosen as a reference base in order to be able to measure price trends over a period of time longer tan a year 2. Reference base year for NIC and HICP Te NIC indices are expressed wit 2010=100 as a reference base year 3. Te HICP, on te oter and, are calculated and publised wit 2005=100 as a reference base, as establised by te Regulation (EC) no 1708/2005 of te 20 t October Classification for consumer expenditure, basket of goods Te classification of consumer spending adopted for te consumer price indices is te international COICOP (Classification of Individual Consumption by Purpose) wose ierarcical structure makes provision for tree levels of disaggregation: Divisions, Groups and Classes. Starting from data referred to January 2011, te indices are calculated according to a more detailed classification sceme wic takes into account, wit some adjustments, te proposed revision of te COICOP classification currently being discussed in Europe for disaggregation levels lower tan Classes. Te classification sceme, wic is adopted for te tree consumer price indices publised by ISTAT, is distinguised by two additional lower levels of disaggregation, Product Sub-Classes and Consumption segments. Consumption segments are represented by a sample of products or groups of products items, called Representative items. In 2015, tere are 618 representative items (1,441 products) for NIC and 623 representative items (1,457 products) for te HICP. As regards NIC, te indices are released wit a level of detail tat reaces 326 consumption segments; NIC indices by type of products (a classification of goods and services different from te COICOP), by regulated and non-regulated products and by purcase frequency are also calculated and released. As regards HICP, te indices are publised wit a level of detail of te COICOP-HICP product classes, in accordance wit te publication carried out by Eurostat for te HICP of single EU countries and for te 1 For te analysis of te flas estimates accuracy and te description of compilation metodology see te metodological note attaced. 2 ISTAT calculates anoter index named Consumer Price Index for blue- and wite-collar worker ouseolds (FOI) based on consumption of ouseolds wose reference person is an employee. 3 Te FOI indices are expressed wit 2010=100 as a reference base year, too. 4

5 HICPs calculated for te EU and te EMU; furtermore, HICP indices by special aggregates (HICP-SA) are released. HICP-SA indices are calculated using te same classification sceme and te same metod adopted by Eurostat (terefore different from te metod used for te calculation of NIC indices by type of products), in order to guarantee comparability among te Italian HICPs and te HICP of te oter EU countries and te HICPs for te EU and te euro area produced by Eurostat 4. All indices are publised in I.Stat, te wareouse of statistics produced by ISTAT, inside te teme Prices, sub-teme Consumer prices (ttp://dati.istat.it/). In I.Stat, in addition to indices at national level, NIC indices at provincial, regional and macro area level and FOI indices at provincial level are publised. Price collection and calculation metod for seasonal product price indices Te metod for collecting and calculating prices of seasonal products is in accordance wit Regulation (EC) no 330/2009 of 22 nd April 2009, wic sets out minimum standards for dealing wit seasonal products in te HICP 5. Tis metod, also used for te NIC 6, is applied to te product groups and classes Fruit, Vegetables, Cloting and Footwear. Te European Regulation defines as a seasonal product one wic, during certain periods of te year (of at least one mont), it may not be possible to purcase, or is purcased in modest or insignificant volumes by consumers. It also establises tat in a given mont seasonal products are considered in season or out of season. On te basis of tis standard, ISTAT as defined a montly calendar for te wole 2015, wic establises in a given mont wen eac specific product belonging to te abovementioned product groups or classes must be considered in season or out of season. Te adoption of a seasonality calendar entails tat te local consumer price survey is carried out only in monts in wic te product in question is defined as in season, wile prices of out of season products will be estimated on te basis of a metod tat is consistent wit standards contained in te aforementioned European regulation. Survey geograpical basis and rate of coverage, temporal coverage Data contributing to te compilation of montly consumer price indices are traditionally collected in two distinct surveys: te local survey, carried out by Municipal Offices of Statistics, under Istat supervision and coordination, and te central survey, carried out directly by Istat. In 2015 te geograpical basis of te survey is made up of 80 municipalities (19 regional capitals and 61 provincial capitals) wic participate in te indices calculation for all te representative items of te basket and of oter 12 municipalities participating in te survey for a subset of products wic includes local tariffs (water supply, solid waste, sewerage collection, gas for domestic use, urban transport, taxi, car transfer ownersip, canteens in scools, public day nursery, etc.) and some local services (building worker, football matces, cinema, teatre sows, secondary scool education, canteens in universities etc.). Overall, te coverage of te index, measured in terms of resident population in te provinces wit capitals participating in te survey for all items in te basket, is 83.5%. Concerning te basket subset including local tariffs and some local services wose weigt on te NIC basket is equal to 6.8% wit te participation of te oter 12 municipalities, te coverage of te survey, measured in terms of provincial resident population, rises to 91.9%. In te consumer price survey, in 2015, tere are more tan 41,300 statistical units (including outlets, enterprises and institutions) were te price of at least one product is monitored, as well as around 8,000 dwellings for observing rents. 501,900 prices are sent montly to Istat by Municipal Offices of Statistics eac mont. Prices collected eac mont directly by Istat are 95,600; among tese, about 13,000 are collected using web scraping tecniques for consumer electronics products price collection on Internet. Te percentage of 4 HICP-SA indices ave been released starting from data referred to February Te description of product classes wic are included in te special aggregates is available on Eurostat web site at te following link: ttp://ec.europa.eu/eurostat/ramon/nomenclatures/index.cfm?targeturl=lst_nom_dtl&strnom=hicp_2000&strlanguagecode=en &IntPcKey=&StrLayoutCode=. Te HICP-SA calculation metod is described in te HICP Compendium wic is downloadable at te following link: ttp://ec.europa.eu/eurostat/documents/ / /ks-ra en.pdf/59eb2c1c-da1f-472c-b191-3d0c76521f9b?version=1.0. Back series starting from January 2001 are publised on I.Stat, te wareouse of statistics produced by ISTAT, inside te teme Prices (ttp://dati.istat.it). 5 It as been adopted starting from data referred to January It is used for FOI indices, too. 5

6 products observed directly by Istat, calculated according to te weigt assigned to eac product witin te NIC, is 23.1%. Prices are collected at central level for tose products (for a total of 76 representative items): - tat do sow no variability along national territory or are administered at national or regional level (i.e. tobacco, telepone services, prescription medicines, magazine and oter periodicals, some transport services suc as national and regional railway transport); - tat are tecnically too complex to be collected at territorial level because of continuous tecnology canges (i.e. consumer electronics); - wose consumption is not strictly linked to te territorial areas (tourist services suc as package olidays, bating establisment etc.). Wit regard to te local survey, price collection is carried out in te first fifteen working days: - bi-montly for products wic sow a strong temporal variability of teir prices (fres fruit and vegetables, fres fis; transport fuels; gas in cylinder and eating oil); - once a mont, for te remaining products. For some goods or services, suc as for example, water supply, town gas and natural gas, urban transport by bus and combined urban transport, taxi or tickets (contributions to NHS) for specialist practice, services of medical analysis laboratories and X-ray centres and oter paramedical services, it is detected te price applied te 15 t day of te mont to wic te index is referred. Concerning te centralized survey, price collection is widely carried out once a mont in te first fifteen working days. Hereafter te exceptions to te general rule: - for some goods and services suc as for example tobacco, games of cance, medicines, telecommunications services, regional railway transport, wagon lits, out of town bus services, out of town combined passenger transport, postal services, igway tolls, car transfer ownersip, car overaul, it is detected te price applied te 15t day of te mont to wic te index is referred; - tree times per mont, according an annual calendar fixed at te beginning of te year, for national railway transport; - bi-montly for passenger transport by air, passenger transport by sea and inland waterway, local daily newspapers and magazines; - on eac day of te mont for touristic, recreational and cultural services (fun parks entrance ticket, bating establisment, ski lifts, etc.). Weigting structure In te table 1 te weigting structure for te year 2015 of NIC and HICP is reported. TABLE 1. WEIGHTS USED FOR CALCULATING CONSUMER PRICE INDICES, BY EXPENDITURE DIVISION. YEAR 2015, percentage values Expenditure divisions Weigts Food and non-alcoolic beverages Alcoolic beverages, tobacco Cloting and footwear Housing, water, electricity, gas and oter fuels Furnisings, ouseold equipment and routine ouseold maintenance Healt Transport Communication Recreation and culture Education Restaurants and otels Miscellaneous goods and services All items NIC HICP Harmonized index of consumer prices at constant tax rates 6

7 Te Harmonized Index of Consumer Prices at constant tax rates (HICP-CT) 7 is calculated as establised by te Regulation (EC) no 119/2013 of te 11 t February It measures te cange of prices at constant tax rates. It follows te same computation principles as te HICP, but is based on prices at constant tax rates. Prices at constant tax rates are estimated cancelling out te effects due to canges in taxes in te current mont compared to te tax rates system in force in December of previous year (calculation period base). Te taxes considered in te HICP-CT are tose directly linked to final consumption. Tey are mainly VAT, excise duties and oter taxes on some specific items (suc as cars and insurance). Subsidies and taxes paid on intermediate stages (e.g. production, transportation) are not taken into account. In principle, fort te compilation of HICP-CT, all taxes sould be included and kept constant; owever, due to practical consideration, taxes wic generate very small tax revenues may not be taken into account. In detail, according to recommendations reported in te Eurostat HICP-CT Manual, taxes wic cover less tan 2% of te total tax revenue can be excluded. On te wole, included taxes must cover a minimum of 90% total tax revenue. Terefore in te compilation of te Italian HICP-CT, taxes kept constant are te following: VAT, excise duties on tobacco and energy items (fuels, eating oil, gas, electricity, etc.), te main local surcarge on electricity and gas, tax for te public liability insurance and contribution to te National Healt Service for transport means insurance. On te basis of National Accounts data taxes wic cover less tan 1% of te total tax revenue are excluded and, on te wole, taxes included cover almost 98% of total revenues carried out wit taxes on final consumption. Te HICP-CT covers te same goods and services as tose covered by te HICP. Te same weigt structure is applied as for te HICP (Table 1). As HICP, it as expressed 2005=100 as a reference base year. Te HICP-CT provides a measure of te teoretical impact of canges of indirect taxes on te overall HICP inflation. It as to be empasised tat it does not provide an exact measure of tis impact, rater an indication for its upper limit. In effect, te difference between HICP and HICP-CT growt rates points to te teoretical impact of tax canges on overall HICP inflation, assuming an instantaneous and full pass-troug of tax rate canges on te price paid by te consumer. It as to be pointed out tat, during te year, te Italian HICP-CT may be revised following introduction of metodological canges required by indirect taxation system canges. Data become final in te next year to te reference one. Indices rates of cange calculation Hereafter formulae for te calculation of montly, annual and annual average rates of cange for consumer price indices are described 8. Te HICP formulae apply also to HICP-CT. Te first expression concerns calculation of rates of cange between indices in te same reference base period: Montly rate of cange (NIC, HICP) Te montly rate of cange is te current mont s index in respect to te previous mont s index (wit one decimal place), for example: MOR I I Feb, 2012 Jan, 2012 ;I Feb, 2012 Round ;. 1 I Jan, 2012 Annual rate of cange (NIC, HICP) Te annual rate of cange is te current mont s index in respect to te same mont s index a year previously (wit one decimal place), for example: ANR I Feb, 2012 I Feb, 2011 ;I Feb, 2012 Round ;. 1 I Feb, 2011 Annual average rate of cange (NIC) 7 Te HICP-CT as been released starting from data referred to Marc Back series starting from January 2002 are publised on I.Stat, inside te teme Prices (ttp://dati.istat.it). 8 Te expressions and te rounding rules described for NIC are also carried out for FOI. 7

8 Te annual average rate of cange is te current annual average index in respect to a previous annual average index (wit one decimal place), for example: AVR I 2012 I2011 ;I2012 Round ;. 1 I2011 Annual average rate of cange (HICP) For te HICP, in a different way compared to NIC, te annual average rate of cange is obtained directly from te montly indices and terefore it is based on te unrounded annual average indices. Tis metod, applied in compliance wit Eurostat, guarantees international comparability of data. For example: AVR I2011;I2012 I Jan, 2012 I Feb, I Dec, ;. I Jan, 2011 I Feb, I Dec, 2011 Round 1 Te following expression describes te calculation of montly rate of cange between indices expressed in different reference base year; it can be also used for te calculation of te annual rate of cange and te annual average rate of cange: Montly rate of cange - Indices expressed in different reference base year X, j; X t n MOR I m I, I I X t 1 t1 t ;. 1 1 n, Round CX X CX ; X... CX ; X X1 m, j t ; t 1 X were I 1 m, j is te index, wit one decimal place, of te mont m year j, expressed in te more remote X reference base X t 1, I n, is te index, wit one decimal place, of te mont n year, expressed in te more recent reference base X t, and C( X i ; X i 1) wit i=2,,t are te splicing coefficients between contiguous reference bases. Tese coefficients are equal to te annual average index of te year corresponding to te new reference base expressed in te previous base, divided by 100. Tey are as many as base canges ave been carried out during te considered period. Flas estimates of HICP: accuracy and computation metodology Flas estimate of Italian HICP (and NIC) are usually publised on te last working day of te reference mont according to te Eurostat release calendar of HICP Flas estimate for euro area. Final data are generally publised around 13 days later. Te aim of te inflation flas estimates is to provide a timely information on inflation, predicting as accurately as possible te final HICP (and NIC) annual rate of cange released about two weeks later. Te analysis of teir revisions represents an important tool to evaluate te correct balancing between te two quality dimensions, timeliness and accuracy. Totally in line wit te Eurostat Statistics Explained on Inflation metodology of te euro area flas estimate, tis section analyses te accuracy of te Italian HICP flas estimates and describes te metodology used in teir computation. Accuracy of flas estimates Table 2 compares te flas estimates and te final HICP annual rates for te same reference mont. Over te last tirteen monts, te maximum difference between te All items flas estimate and te HICP annual rate was 0.1. Over te same period, wit reference to te main special aggregates, te maximum differences between te flas estimate and te final HICP annual rate concerned Energy (0.5 in April 2015) and Non energy industrial goods (0.3 and 0.5 respectively recorded in January and August 2015). Te igest differences for Non energy industrial goods togeter wit te igest frequency of revisions (10 monts out 8

9 of 13 monts) are mainly due to te sales dynamics of Cloting and footwear, for wic te partial information available as a iger impact on te flas estimate and terefore it turns out to be less accurate. TABLE 2. FLASH ESTIMATES AND HICP ANNUAL RATES FOR THE ALL-ITEMS AND MAIN SPECIAL AGGREGATES. NOVEMBER 2014-NOVEMBER 2015, percentage values (Base 2005=100) Special aggregates Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Food including alcool and tobacco: Processed food (including alcool, tobacco) Processed food Energy Non energy industrial goods Services All-items All items excluding energy and unprocessed food (Core inflation) All items excluding energy, food, alcool and tobacco All items excluding energy Flas HICP Flas HICP Flas HICP Flas HICP Flas HICP Flas HICP Flas , HICP Flas HICP Flas HICP Flas HICP Te Mean Absolute Deviation (MAD) provides anoter way to measure accuracy. It is calculated as te average of te absolute differences between te flas estimate and te final HICP annual rate over te last tirteen monts. Figure 1 sows te MAD for te all-item index and te main special aggregates. Over te last tirteen monts, te Non energy industrial goods component as recorded te igest MAD (0.138 percentage points). FIGURE 1. MEAN ABSOLUTE DEVIATION BETWEEN FLASH ESTIMATES AND HICP ANNUAL RATES. NOVEMBER NOVEMBER 2015, percentage points Food including alcool and tobacco Processed food (including alcool, tobacco) Unprocessed food Energy Non energy industrial goods Services All-items All items excluding energy and unprocessed food (Core inflation) All items excluding energy, food, alcool and tobacco All items excluding energy

10 Te direction of inflation is correctly predicted if bot te flas estimate and te final one sow increasing (declining or no canging) annual rates of cange wit respect to tose ones calculated in te previous mont. Tere are tree possible outcomes for te comparison of te direction of inflation: - te flas estimate correctly predicts te direction of inflation, so te predicted rise, decline or no cange in inflation is confirmed by final data (denoted by ); - te flas estimate wrongly predicts te direction of inflation, namely it predicts an increase wen tere is a decrease or vice versa (denoted by ); - te flas estimate points to an increase or a decrease but te final annual rate of cange remains uncanged; or te flas estimate predicts no cange in inflation but te final figure points to an increase or a decrease (denoted by ). Over te last tirteen monts, te flas estimate accurately predicted te inflation direction in 116 out of 130 estimates. TABLE 3. FLASH ESTIMATE PREDICTION CAPACITY OF THE DIRECTION OF INFLATION MEASURED BY HICP. NOVEMBER 2014-NOVEMBER 2015 Special Aggregates Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Food including alcool and tobacco: Processed food (including alcool, tobacco) Unprocessed food Energy Non energy industrial goods Services All-items All items excluding energy and unprocessed food (Core inflation) All items excluding energy, food, alcool and tobacco All items excluding energy Computation metodology of flas estimates For te Italian HICP (and NIC) flas estimate compilation, eac mont, - prices collected at local level by around 60 municipalities (out of 80) are used. Out of tese municipalities, tere are te 38 municipalities wic calculate te preliminary local consumer price indices and publis tem independently, at te same time of Istat national CPI and HICP release. Data collected by te oter 12 municipalities participating in te survey for a subset of products (local tariffs and some local services) are not used; tese data are used for te compilation of final indices; - all prices collected directly by ISTAT (via internet and oter sources) are used. Tese prices refer to 76 representative items wic cover 21.4% (according to teir weigts) of te Italian HICP basket (23.1% of te NIC one). As soon as indices are calculated for representative items for wic prices are collected directly by ISTAT, representative item indices for te municipalities, wic participate in te flas estimate of inflation rate, are compiled. For te oter municipalities, wic do not participate in te flas estimation, representative item indices are generally 9 calculated applying to te indices of te previous mont, te montly rate of cange of 9 For some representative items among oters, rents and local tariffs suc as water supply, solid waste, sewerage collection, urban transport services by road for te municipalities tat do not participate in te flas estimation, indices are estimated by carrying forward te price of te previous mont. Te adoption of tis different estimation tecnique is due to te fact tat te evolution of prices in te oter municipalities of te same region is not considered a satisfactory proxy. 10

11 te regional representative item indices. Te latter are calculated using data of municipalities wic participate in te flas estimate, as follows: m,a were i I is te elementary index of representative item at municipality level i of te reference mont m i of year a and is equal to te sare of resident population in te municipality i of region R on te total i ir resident population of te region. As soon as representative item indices of all municipalities are compiled, regional and, ten, national indices are calculated (by representative items, by upper aggregates and for all items). If all municipalities of a certain region are not included in te flas estimate, te representative item indices of tis region are calculated applying to te indices of te previous mont, te montly rate of cange of national representative item indices. Te latter are calculated using data of regions wic participate in te flas estimate, as follows: were m,a R I year (a) and is elementary index of representative item at regional level of te reference mont (m) of R 20 R R1 R I m, a i i R ir i I i 20 m, a R I 20 R I R1 R R1 is equal to te sare of ouseold consumption expenditure for te representative item in te region R on te national ouseold consumption expenditure for te same representative item. Once representative item indices of all regions are compiled, national indices are calculated (by representative items, by upper aggregates and for all items). m, a m, a For more details please refer to te Italian version Contact person: Valeria Stancati (stancati@istat.it) Consumer price statistics ISTAT Italian National Institute of Statistics Via Torino 6 Rome Italy pone