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Annual Rate of Change 2,7% 

In July 2021 the Harmonized Index of Consumer Prices increased by 2,7% when compared to the index of July 2020 while, when compared to the index of June 2021, the HICP increased by 0,2%. For the period January - July 2021 the HICP recorded an increase of 0,9% compared to the corresponding period of the previous year. (Table 1)

Note: The HICP in Euro area for the last month is based on EUROSTAT’s estimation (flash estimate).

Compared to July 2020, the largest changes were noted in Housing, Water, Electricity, Gas and Other Fuels and Transport with percentages of 13,5% and 8,4% respectively. (Table 1)

Compared to June 2021, the largest change was recorded in Clothing and Footwear with a percentage of -13,3%. (Table 1)

For the period January – July 2021, compared to the corresponding period of the previous year, the largest change was noted in Transport (5,5%). (Table 1)

As regards the economic origin, the largest change when compared to the index of July 2020 was observed in Energy with a percentage of 23,5%. When compared to the index of the previous month, the largest changes were monitored in Non energy industrial goods and Energy with percentages of -3,3% and 3,0% respectively. (Table 2)

METHODOLOGICAL NOTES

Definitions

The Harmonized Price Index (HICP) an economic indicator constructed to measure the changes of prices over time of consumer goods and services acquired, used or paid by households and tourists within the economic territory of the country. The HICP is calculated according to a harmonized approach and methodology laid down by a series of regulations of EU.

The Annual change shows the change of the HICP when compared with the index of the corresponding month of the previous year.

Products/Services

From January 2018 and onwards, the products included in the HICP have been revised. The revision was based on the results of the Household Budget Survey 2015/2016.

Collection

The price collection is carried out only in urban districts of Nicosia, Larnaca, Limassol and Paphos. For each city, the fluctuations in the product prices each month are weighted according to their population. Specifically, the weights for the four districts are: Nicosia 42%, Limassol 30%, Larnaca 18% and Paphos 10%.

The prices of 805 goods and services are recorded once every month, except for some seasonal products (e.g vegetables and fruits), meat and fuels, whose prices are collected every week (every Thursday). The collected prices are those actually paid by consumers for the purchase of specific goods and services, and they include various taxes, such as the Value Added Tax and excise duties. For the calculation of the Index end-of-season sales prices are taken into account as well as special offer prices which are available for the general public and have no restrictions.

Weights

The weight of the HICP goods and services are calculated based on consumption expenditure (of both households and tourists) incurred in the economic territory of the country. Up to 2011, the main source for the consumption expenditures was the Household Budget Survey, while from 2012 and onwards, data from the National Accounts are utilized satisfying relevant Eurostat’s Regulation (No 1114/2010).

Base year

The index reference period was 2005=100 for the period between January 2006 and December 2015. From January 2016 and onwards, the base year is 2015=100.

Classification                                                                                                                 

Until December 2015, COICOP 4 classification was used for the calculation and the dissemination of the HICP. From January 2016 and onwards, CYSTAT is adopting the ECOICOP classification satisfying relevant Eurostat’s Regulation. In other words, the lowest level of detail for the classification used in CPI is COICOP 5-digits.

With the publication of February 2019, CYSTAT is publishing HICP special aggregates (economic origin) compiled from more detailed input data.

Methodological change                                                                                                      

Following Eurostat’s requirement for the HICP in order to be in line with Regulation No 330/2009, a different method for the compilation of the index of fresh fruits and vegetables has been applied starting with the index of January 2021. The HICP of July 2021 with the index of fruits and vegetables compiled with the previous method would be 102,44 units and the inflation 2,7%.

Exceptional Methodological Adjustment

The implementation of precautionary measures and relevant decrees to address the negative consequences of COVID-19 disease had a direct impact on the price collection process of certain goods/services for the month of July 2021. As the problems anticipated were common to all Member States of the European Union they were tackled by applying the same methodologies under the supervision and guidance of the European Statistical Office (Eurostat).

Missing Prices

In cases where products/goods were not available for consumption, the following practices were followed:

• Missing prices were imputed by the price change of other products or services in the same subcategory,

• In the cases where all the prices were missing for a subcategory, then the previous’ month collected price data were taken as the price of the present month and it included prices that rarely change such as cultural services.

Seasonal Products/Services

The missing airfares were estimated by carrying forward previous’ month prices adjusted with the seasonal factor recorded last year. The missing prices for hotel accommodation were estimated in order to preserve their seasonal pattern.

Weights

The weights of goods and services in the HICP basket have been reviewed and adjusted to be representative for expenditures shares of 2020. The weights are kept constant throughout the year.

Further information:

Statistical Service (CYSTAT) Website, subtheme Harmonized Index of Consumer Prices

Contact

Constandia Papageorgiou: Tel: +35722602116, Email: cpapageorgiou@cystat.mof.gov.cy

Andri Eftychiou: Τel: +35725878595, Email: aeftychiou@cystat.mof.gov.cy

EH/ECHR