Consumer Price Indices - Detailed Information

Commentary

Contents

The consumer price indices published from January 2007 are calculated using a revised consumer basket reflecting the new weighting structure of 2005. The revision has no impact on the data published up to December 2006.


The consumer price level grew by 1.0% in January 2007, compared to December 2006, of which administrative prices increased by 3.8% and market prices by 0.4%. The month-on-month increase in regulated prices (3.8%) was mainly due to prices of ‘housing, water, electricity, gas and other fuels‘, where prices of electricity rose by 7.9%, net actual rentals by 4.5%, water supply by 6.6% and sewerage collection by 5.5%. The prices of tobacco products increased by 2.5% due to a higher excise duty since April 2006. In ‘recreation and culture‘, the TV fee rose by 20.0%. The prices of social care increased by 2.8% as a result of amendment to the Act on the provision of social services. A downward effect on the price level had a decrease in the prices of natural gas (-4.2%). The share of regulated prices in the month-on-month increase of consumer prices was 0.6 percentage points.

The growth of market prices (0.4%) was mainly affected by price increases in ‘food and non-alcoholic beverages‘ caused mainly by higher prices of vegetables (11.3%) and non-alcoholic beverages (2.8%). The prices of alcoholic beverages went up by 0.9%. In ‘restaurants and hotels‘, prices of canteen meals increased by 1.5% and prices of accommodation services by 0.9%. Growth of market prices was curbed by a drop in prices of ‘clothing and footwear‘, primarily due to the seasonal sale of winter clothing and footwear. In ‘transport‘, the drop in prices of automotive fuel continued (-2.1%) and prices of new and used cars went down moderately. The share of market prices in the month-on-month increase of consumer prices was 0.4 percentage points.

In total, prices of goods rose by 0.8% and prices of services by 1.4%.

In terms of year-on-year comparison, consumer prices in January 2007 were by 1.3% higher than in January 2007, which was by 0.4 percentage points down on December 2006. This slowdown was affected by decelerating increase in prices of housing (2.2% as against 3.9% in December 2006); the reason was different m-o-m growth of prices of housing in January 2006 (3.7%) and January 2007 (2.0%). Year-on-year growth slowed down also in ‘communications‘ and ‘health‘.

The biggest influence (0.6 percentage points) on the y-o-y growth of consumer prices was still (despite a slowdown of the y-o-y growth) prices of ‘housing, water, electricity, gas and other fuels‘, where prices of net actual rentals increased by 4.6%, water supply by 6.4%, sewerage collection by 6.0%, electricity by 7.9%, and solid fuels by 15.8%. The second biggest influence on the growth of the price level (0.4 percentage points) was prices of ‘food and non-alcoholic beverages‘. Among the food items, prices of potatoes were higher by 123.3%, tomato-type and other vegetables by 17.8% and 6.4% respectively, and bread and cereals by 11.3%.

On the other hand, the growth of the price level was curbed by lower prices of ‘clothing and footwear‘. In ‘transport‘, prices of automotive fuel (-3.5%) and passenger cars (-2.3%) were down. The prices of household appliances, audiovisual electronics, photographic and cinematographic equipment and personal computers decreased too.

In total, prices of goods grew by 0.3% and prices of services by 3.1%.

Inflation rate, i.e. increase of the average consumer price index for last 12 months related to the average CPI for the previous 12 months stood at 2.4% in January, i.e. by 0.1 percentage points down on December 2006.

According to preliminary data of Eurostat, the year-on-year increase in the average harmonized index of consumer prices (HICP) in the EU25 in December 2006 was 2.1% (like in November). The highest price increases were observed in Latvia (6.8%) and Hungary (6.6%), the lowest in Malta (0.8%) and Finland (1.2%). Consumer prices in Slovakia grew by 3.7% (like in November). The price level in Germany increased by 1.4% (1.5% in November).

According to preliminary calculations, the HICP in the Czech Republic rose by 1.0% month-on-month in January 2007 and by 1.4% year-on-year (1.5% in December 2006). According to a flash estimate released by Eurostat, the HICP in the euro area was up by 1.9% in January 2007.


In January 2007, in comparison to December 2006, consumer prices grew by 1.4% in households of pensioners and by 1.0% in households of employees. Both types of households recorded a higher consumer price index for ‘housing, water, electricity, gas and other fuels‘: households of pensioners by 2.7% and households of employees by 3.0%. The increase was mainly affected by higher prices of electricity, water supply, sewerage collection, solid fuels, and net rentals paid by tenants. Higher index was registered for ‘recreation and culture‘ (3.2% for pensioners, 1.6% for employees) due to growth of prices of domestic recreational stays, musical instruments and sports facilities. On the other hand, a lower index was recorded for ‘clothing and footwear‘ (-1.6% for both pensioners and employees) due to lower prices of ready-made clothing and footwear. The consumer price index for ‘transport‘ was down for pensioners and employees (-0.6% and -0.5%, respectively) as a result of lower prices of automotive fuel, passenger air transport and bicycles.

In the capital city of Prague, the overall consumer price index (cost of living) grew by 0.9% month-on-month (1.0% in the whole Czech Republic). The consumer price index for ‘housing, water, electricity, gas and other fuels‘ increased by 1.6% (2.0% in the Czech Republic) due to higher prices of electricity, water supply, sewerage collection, and net rentals paid by tenants. Prague registered a higher index for ‘alcoholic beverages, tobacco‘ by 1.6% (1.8% in the Czech Republic) mainly due to price increases in tobacco and spirits. The consumer price index for ‘recreation and culture’ grew by 1.4% (1.8% in the Czech Republic), affected by higher prices of domestic recreational stays, musical instruments and sports facilities. On the other hand, a drop occurred in ‘clothing and footwear‘ by 2.3% (-1.6% in the Czech Republic) as a result of lower prices of children’s and women’s clothing and footwear. The consumer price index for ‘transport‘ decreased by 0.6% (-0.6% in the Czech Republic as well), which was affected by lower prices of automotive fuel and passenger air transport.

Starting from January 2007, the consumer price indices are calculated using the weighting structure of household expenditures in 2005. To make the indices published up to the end of 2006 (which used the structure of the year 1999) comparable with the new indices published from January 2007, coefficients (conversion bridges) are employed. The coefficients for the aggregate indices including back-cast time series for individual months of 2006 are given in this publication - Table 6. The coefficient is defined as the year-on-year index calculated using the new weighting pattern divided by the year-on-year index calculated using the former weighting pattern. The December 2006 coefficient for the aggregate consumer price index equals 0.997.