Consumer Price Index revised

Statistics Finland has made revisions to the Consumer Price Index. The base period of the Consumer Price Index is updated every five years because changes take place in household consumption. The base year of the revised Index is 2010. At the same time the weight structure of the Index and the commodity basket of the price monitoring have been updated to correspond with consumption in the new base year.

Approximately 15 per cent of the contents of the commodity basket changed in the revision. New commodities in the Consumer Price Index include noodles, granola muesli, bacon, warm smoked fish, lactose-free milk drink, fresh herbs, energy drink, knitting wool, micro fibre cloth, piece of costume jewellery and silver necklace. Items removed from the Index include plain breakfast cereals, cornflakes, beef liver, full cream milk, yeast, dress fabric, wardrobe, stereo equipment, gold chain and wristwatch.

The Index endeavours to monitor development in the prices of commodities that are as representative as possible. Thus, for instance, meat aspic was changed to lunch salad portion, car stereo system to navigator, plastic bag to organic waste bag, roller skates to Nordic walking sticks, ladies' scarf to neck scarf and repair of a piece of furniture to furniture assembling service. The Index monitors development in the prices of 483 commodities in all. Every month, Statistic Finland interviewers collect altogether around 50,000 prices from 2,700 outlets for the Consumer Price Index. In addition, some 1,000 items of price data are gathered by centralised collection

Weight structure of the Index corresponds with consumption in 2010

The weight structure of the Consumer Price Index 2010=100 is based on National Accounts data concerning the year 2009, which have been updated to correspond with the value of private consumption in 2010. In 2010, the value of private consumption was EUR 83.3 billion. In the previous base year of 2005 the value of consumption was EUR 70.4 billion, and in 2000, respectively, EUR 56.5 billion.

Comparison of weight structures of Consumer Price Indices 2010=100, 2005=100 and 2000=100, per cent

The weights of transport and communications decreased most. In the group of transport, especially the weight of cars contracted. In communications, the weight of both telephones and phone calls is lower than before in private consumption. This means that changes in the prices of these commodities have a smaller impact on the Consumer Price Index than before.

Weights went up most in housing costs. In this group, the weights of new dwellings and electricity have grown most. Thus, changes in the prices of these items have a greater impact on the Consumer Price Index than before.

Base year of Harmonised Index of Consumer Prices remained unchanged

Statistics Finland has also revised the Harmonised Index of Consumer Prices calculated for Eurostat, the Statistical Office of the European Communities. Year 2005 remains as the base year of the Harmonised Index of Consumer Prices.

The Harmonised Indices of Consumer Prices are primarily used in price comparisons between the EU countries. The European Central Bank uses the Harmonised Index of Consumer Prices as the measure of inflation in its monetary policy.

The Finnish Harmonised Index of Consumer Prices is based on the same weight and price data as the Finnish national Consumer Price Index but its commodity selection is reduced. In the Harmonised Index of Consumer Price, the concept of consumption excludes owner-occupancy, games of chance, interests and tax-like payments. The Harmonised Index of Consumer Prices covers nearly 90 per cent of the national Consumer Price Index.

Source: Consumer Price Index 2011, January. Statistics Finland

Inquiries: Mari Yl�-Jarkko +358 9 1734 3310, Christina Telasuo, +358 9 1734 3472, Juhani Pekkarinen +358 9 1734 3476

Director in charge: Kari Molnar

Links:
Release of Consumer Price Index