EUROSTAT
Directorate C: National Accounts, Prices and Key Indicators
DMES/2017/12-15
17th Meeting of the
Directors of Macro-Economic Statistics
Luxembourg, 14 – 15 December 2017
Price statistics
Item 19 on the Agenda
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Price statistics
EXECUTIVE SUMMARY
The document informs on various activities in the areas of HICP, real estate statistics and PPPs.
The DMES Members are invited to take note of the activities.
Price statistics
1.Introduction
This document informs on progress made in various strands of work in the areas of harmonised index of consumer prices (HICP), real estate statistics and purchasing power parities (PPP)
2.HICP
2.1.HICP implementing act
Regulation No 2016/792 on harmonised indices of consumer prices and the house price index was adopted in 2016. The regulation brought about the need to adopt new implementing measures in the areas that were for the first time introduced as HICP obligations, for example the flash estimate or the inventory. Moreover, the regulation obliges Eurostat, when first adopting new implementing acts, to incorporate relevant provisions of existing regulations adopted on the basis of the repealed Regulation No 2494/95 (those regulations remain applicable until the new implementing measures are adopted).
Eurostat will combine existing HICP related acts and the necessary new elements in one consolidated implementing act, while the issues relating to the house price index and the owner-occupied housing price index will be covered by a separate implementing act.
To assist Eurostat in preparing a draft implementing act, atask force was set up in 2016. The members of this task force are representatives from four Member States (DE, IT; LU, NL), Eurostat and the European Central Bank. So far, the task forcehas met three times, in June 2016 and twice in 2017 (June and October).
The task force will continue its work in 2018 and it is envisaged that it will meet three times in 2018. Eurostat will also organise a workshop with Member States in October 2018 to share in depth the details of the work done so far, and get feedback from all countries.
The finalisation of the draft HICP implementing act by the task force will be followed by the necessary consultative and administrative procedures. The Price statistics working group will be consulted, then the DMES. The adoption of the implementing acts will probably take place towards the end of 2019.
2.2.Transaction data and web-scraping
Extending the use oftransactions and web-scraped pricesin the HICP is considered as a priority in the area of developing consumer price indices. Eurostat supports this modernisation work through grants to Member States and developing necessary guidance for their implementation. To that end Unit C4 produced a Practical guide for processing supermarket scanner data that was released in CIRCABC in September 2017. Eurostat has organised, or contributed to, a number of workshops and other meetings that were used as a platform for sharing results, discussion and cooperation. The issues relating to the use of modern data sources will remain topical in 2018.
2.3.HICP manual
The HICP methodological manual manuscript was completed in the autumn and presented to the Price statistics working group in November 2017. The manual covers the entire HICP process: aim and history; concepts; weights; sampling; price collection; replacements and quality adjustment; the treatment of special cases; index calculation; HICP-CT and HICP-AP; revisions; data requirements and processes at Eurostat; the treatment of selected product groups.
Thefinal draftis now being prepared for official release in Eurostat's guides and manuals series. The publication will be made available on Eurostat's website by the end of April 2018. Also a limited number of hard copies is planned to be produced.
2.4.Owner-occupied housing and the HICP
Regulation No 2016/792 requires that the Commission prepares a report addressing the suitability of the owner-occupied housing price index for integration into the coverage of the harmonised index of consumer prices. The report has to be done by 31 December 2018
Eurostat will write the report during the first quarter of 2018. A draft report will be shared with the price statistics working group and the DMES in the second quarter of 2018, before the start of the internal adoption procedure of the Commission.
A more comprehensive presentation of the report is given in document DMES/2017/12-11.
2.5.HICP flash estimates
According to Regulation No 2016/792, starting in January 2017 the euro area countries are obliged to transmit the flash estimate data to Eurostat.
Before the transmission of the flash estimate data became obligatory, 15 out of the 19 euro area countries were already providing the data. Additionally, one country outside the euro area (Poland) was providing this information.
The implementation of the new requirements ran smoothly and was successful thanks to the cooperation of the national statistical institute; all euro area countries and Poland are currently transmitting the flash estimate data. Most countries provide Eurostat with the complete dataset, i.e. the same detail as for the mid-month indices, down to ECOICOP level 5. National statistical institutes that are not yet able to provide the complete dataset are sending the all-items, main components and the food breakdown into processed and unprocessed food, which is the detail used in the release of the euro area flash estimate and thus the minimum requirement.
In March 2017, Eurostat published for the first time a flash estimate of the HICP all-items annual rate of change by country. Only the figures for those countries that agreed to the dissemination were published, namely, the following eleven countries: CY, DE, ES, FR, LT, LV, IT, MT, PL (published in April 2017 for the first time), SK and SI.
Between January and September 2017, the HICP final data confirmed the euro area flash estimate for the HICP all-items in every month. As regards the euro area special aggregates, only minor discrepancies were registered during the period under review. There are frequent differences of around 0.1 percentage points in Energy, explained by the higher annual rate of change in absolute terms and by the volatility that this component usually has. In relative terms, the accuracy for Energy is similar to that for the other three main components. Analysis made at country level shows similar results.
2.6.ECOICOP data availability
Eurostat published ECOICOP level 5 data for 23 countries on 17 October 2016 for the first time. During 2017, data availability has improved considerably in terms of both the number of countries and the length of the historical series. Currently, Eurostat publishes ECOICOP level 5 data for the HICP for all 28 EU Member States, the EEA countries and for some candidate countries. Overall, ECOICOP level 5 data for 34 countries is currently published, while the validation process is ongoing for another three countries. In most cases, the series start in 2015 or earlier. Besides the publication of the level 5 sub-indices, Eurostat plans to start computing both the ECOICOP level 5 European aggregates and special aggregates based on level 5 sub-indices. This publication is planned to take place in the end of 2018.
2.7.HICP meta data, inventories and quality reports
With the entry into force of Regulation No 2016/792 Member States are obliged to provide to Eurostat annual standard quality reports and annually updated inventories. In order to facilitate and modernise the reporting Eurostat is running a project which aims at integratingthe inventory and the quality-report in the ESS metadata handler tool which is currently used only for standard metadata. At this occasion Eurostat is also reviewing the structure of the HICP inventory with the objective to align it with the Single Integrated Metadata Structure (SIMS v2.0) as well as to update it and the guidelines with a view to the current HICP requirements.
The plan is that the metadata reporting – inventories, quality reports and standard metadata – will be done solely using the ESS metadata handler once the tool is finalised. Thus the ESS metadata handler will replace the various formats (Word, Excel and PDF) in which the inventories are currently transmitted. Eurostat has implemented the draft inventory structure and concepts in the ESS metadata handler. The tool is planned to be available from April 2018.
2.8.Quality improvement actions
Quality improvement actions relating to HICP are brought forward and discussed in a dedicated task force. It is a forum for preparing HICP recommendations, methodological improvements and other changes before they are submitted to the Price statistics working group. The task force consists of statisticians from Belgium, Germany, France, Ireland, Italy, Luxembourg, Netherlands, Norway, Austria, Portugal, Finland, Sweden and the European Central Bank (ECB).
In 2017 the task force met in April andJuly.In 2018 the work of the task force will continue on topics that have been on the group's agenda already but for which no conclusion has been yet reached. These include work on quality adjustment for cars, the HICP-AP recommendation and, possibly, the flights and package holidays recommendation. The discussion on the influence of digital economy and e-commerce to the HICP will also continue in 2018.
The key area of work, and for which the involvement of the task force will be essential in 2018, is input for the new HICP implementing act. The HICP implementing measures, which are currently under review, need to be brought up-to-date. This may require changes to the requirements that go beyond mere transposing of provisions from existing regulations, and thus there is a need for in-depth discussion of such changes at the quality task force first and then in the Price statistics working group The envisaged changes relate to the use of scanner data in general and the application of multilateral methods in the index. Also the concept of consumption segments as well as minimum standards for sampling, quality adjustment and replacements are to be thoroughly reviewed, in particular vis-à-vis their adequacy for scanner data but also in their own right. Moreover, the methodology for seasonal items is planned to be revisited.
HICP Compliance Monitoring
Eurostat has established a compliance monitoring system for the HICP with the aim to ensure the correct and harmonised implementation of the legal obligations and methodological recommendations in the Member States. The HICP compliance monitoring is considered important for ensuring the high quality of European inflation figures and, as a consequence, the continued credibility of the HICP.
Eurostat undertook three compliance monitoring visits in two Member States in 2017and plans to make futurevisits to Cyprus, Malta and Romania.
3.Real estate statistics
3.1.Re-referencing of HPI and OOHPI
With the release of the 2017 Q1 results on 19 July, the house price index (HPI) and owner-occupied housing price index (OOHPI) are presented with 2015 as the new index reference period.
3.2.Supplementary indicators on housing
In the context of the G20 - Data Gaps Initiative, an agreement was reached on indicators related to housing and in June 2017 Eurostat performed a stock-taking exercise with Member States to find out which of them would be immediately available. Together with the HPI and the OOHPI they would form a coherent data set to inform policy makers and other users on developments of housing markets. The plan is to ask countries to transmit those data on a voluntary basis; the data collection is planned to start during 2018 (see also point 3.3).
3.3.Quarterly house sales
The quarterly house sales indicator is the only indicator missing among those on the list of Principal European Economic Indicators. This was also highlighted by the ECOFIN Council in its conclusions on the 2017 statistical package.
Eurostat has been working with Members on three points: (i) an overview of open conceptual and methodological issues was drafted by Eurostat and updated thanks to contributions from Member States, and discussion will continue in 2018; (ii) a transmission scheme will be set up at the beginning of 2018 to regularly receive data from those countries that are in a position to provide the indicator; and (iii) remaining countries have been encouraged to undertake pilot studies with financial support from the Commission.
3.4.Commercial property price indicators
Against the background of the increasing user demand at the EU level for commercial property price indicators the ECB and the European Commission (Eurostat) established a joint expert group to explore the further development of commercial property price and associated indicators. The group produced a report listing the physical market variables required and conducted a stock-taking exercise of those variables which already exist and are under development in Member States. More comprehensive presentation of the work of the group and their report is given in thedocument DMES/2017/12-12.
In early-2018 Eurostat will publish a statistical report, produced under the aegis of the Inter-secretariat working group of price statistics, which describes methods and issues related to data collection and index compilation of CPPIs.
In early-2019 Eurostat will organise an international conference on real estate covering both residential and the commercial aspects.
4.Purchasing power parities
The production of PPPs is a multilateral exercise involving the national statistical institutes of 37 participating countries, Eurostat and the OECD. The common rules for the provision of basic information, the calculation and dissemination of PPPs are laid down in Regulation No 1445/2007. Results are published twice per year; first estimates of PPPs and related indicators for the preceding year are released in June each year. In the following December, these indicators are recalculated and released for the three preceding years.
In 2017 a new round of the International Comparison Program was launched. The program is a worldwide statistical initiative designed to estimate PPPs that can be used as currency converters to compare the data of countries around the world. Eurostat will participate in the exercise and provide the required data for the 28 EU Member States, three EFTA countries, five candidate countries and one potential candidate country. The results for the 2017 cycle are planned to be ready in December 2019. Eurostat will also assist Georgia and Ukraine to participate in the program through the Eurostat-OECD program.
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