|Unit||Index 2015=100, CDASA|
|Adjustments||Calendar Adjusted and Seasonally Adjusted|
The consumer price index (CPI) for Germany measures the average price change of all goods and services purchased by households for consumption purposes, e.g. food, clothing, motor vehicles, rents, cleaning services, repairs, etc. According to the domestic concept all expenditures carried out in the territory of Germany are included. Hence, the outlay of single-person households, the married couples, families and couples of pensioners as well as the foreign tourist’s expenditure is included. The percentage change of CPI to the same month of the previous year or to the previous year is colloquially called inflation rate.
The consumer price index, which is one of the main indicators for assessing monetary value trends in Germany, is used as a benchmark, e.g. in wage negotiations or in agreement clauses regarding the level of recurring payments. It is also used for deflation purposes in national accounts, for example, in the context of calculating real economic growth.
For European purposes, the Federal Statistical Office (FSO) additionally calculates a harmonised index of consumer prices (HICP) which measures the price trends in Germany in conformity with harmonised European concepts, methods and procedures.
The source writes:
Calculating the consumer price index is based on a “basket” which includes all goods and services – the relevant components of consumption in Germany. The basket could be said to consist of two levels.
At the upper level there are approximately 600 types of goods such as salt, children’s shirt, taxi ride or magazine. These types of goods are assigned weighting shares (weights), with which the various price trends are included in the computation of the total consumer price index. The basket composition with the weights remains steady over an interval of five years.
For the types of goods of the upper level of the basket precise products are selected for price collection in each selected shop, e.g. 500g package of table salt. These particular products comprise the lower level of the basket. At this level the basket is continuously updated, as some less important models need to be replaced or completely new variants need to be added.
Concrete products are selected for price monitoring in the context of representative sample surveys. Therefore the whole federal territory is divided into 94 regions. Usually in every region first representative cities and municipalities are chosen. In these cities and municipalities then representative shops and there the most frequently sold goods and services are selected. The number of selected goods and services is based on the share of expenditures for a type of good in the total household final consumption expenditure. Also the less important categories of goods and services need to be included in the sample to acquire the coverage of the whole range of household final consumption expenditure.
To collectors gather the prices of the same products in the same shops in Germany every month. Moreover, prices are centrally collected for various types of products – e.g. via the internet or in mail-order catalogues. More than 300,000 individual prices are collected every month. The prices taken for price observation are purchaser's prices (including VAT and excise duties). An item selected for price monitoring purposes is replaced by another one in case that the former is only seldom or no longer sold.
Harmonized index of consumer prices (HICP)
Since 1997 the Federal Statistical Office (Destatis) has calculated both the national consumer price index (CPI) and a harmonised index of consumer prices (HICP) for Germany. The HICP was developed in the European Union (EU) to permit the international comparability of price trends and their aggregation into a headline inflation rate for Europe and the euro area. The HICP for Germany is derived from the same data base as the German CPI, both concerning the monthly price survey and calculating the detailed expenditure weights contained in the weighting patterns. However, the two baskets of goods and services contain different items and different aggregate weights are used when calculating CPI and HICP. Unlike the national CPI, the HICP includes neither owner-occupied housing nor games of chance. Special attention is paid to ensuring the weights are up to date when calculating the HICP. Since January 2012 the aggregate weights in the HICP have been updated annually using the preliminary results of the national accounts for the year before last (t–2). Similarly, methodological adaptations in the HICP can be implemented on an annual basis.
A preliminary estimate of CPI and HICP is issued two working days before the end of the reference month, at the latest. The final results are released around the middle of the subsequent month.
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