What does the indicator describe?
In addition to the Consumer Price Index for Germany (CPI) and the Retail Prices Index, the Federal Statistical Office has calculated for European purposes a Harmonised Index of Consumer Prices (HICP) for Germany since 1997. For the HICP, time series from January 1995 are available. The HICP is used to measure inflation in the context of international, mostly inner-European comparisons. Its calculation, which relies on harmonised concepts, methods and procedures, reflects the development of prices in the individual states based on national consumption patterns. The HICP serves, among other things, to measure the convergence criterion of "price stability" as a basis for judging whether a Member State can participate in European economic and monetary union.
The HICP is calculated for the Member States of the European Union (EU), Norway, Iceland and Switzerland. It is used to form aggregates for the euro zone (Monetary Union Index of Consumer Prices - MUICP), for the EU (European Index of Consumer Prices - EICP), and for the European Economic Area (European Economic Area Index of Consumer Prices - EEAICP). The European Central Bank makes use of the MUICP in the context of its monetary policy to judge price stability within the euro zone.
How is the Harmonised Index of Consumer Prices calculated?
The methodology for calculating the HICP has been laid down in various regulations of the European Commission and in supplementary guidelines. Like the CPI for Germany, this index is based on the international "Classification of Individual Consumption by Purpose" (COICOP), and it is largely derived from the CPI for Germany. In particular, the prices collected for the German CPI are also used to calculate the German HICP.
Like the German CPI, the HICP measures only pure price changes. This is ensured by determining and comparing the prices for a bundle of consumer goods and services which changes neither in quantitative nor in qualitative terms over time. Therefore, the consumption structure and all other factors which have an impact on the prices (e.g. unit of quantity, distribution channels, terms of delivery and payment) are kept unchanged in the calculations. If one of the variables changes, the difference between the new and the former price may include a non-genuine price change which will subsequently be eliminated by means of various quality adjustment procedures. The HICP is a Laspeyres price index which, in formal terms, is calculated as a chain index.
The difference in coverage between the German CPI and the German HICP consists mainly in the additional inclusion of owner-occupied residential property in the German CPI . Since 2003, however, studies have been carried out to examine a possible inclusion of proprietors' expenditure in accordance with the net purchase concept in the HICP. Furthermore, in contrast to the CPI for Germany the HICP for Germany does not include games of chance. Up to December 2009 also motor vehicle tax and registration charge were not included in the HICP for Germany.
When and where is the Harmonised Index of Consumer Prices published?
Like for the CPI for Germany, a provisional and a final result are released for the German HICP. While the publication of the preliminary result usually takes place two working days before the end of the reference month, the final result for the German HICP is released around the middle of the subsequent month. The press releases and the detailed release calendar are available on the web site of the Federal Statistical Office. Eurostat, too, publishes the European.