STAT/06/47
20 April 2006
March 2006 Euro-zone annual inflation down to 2.2% EU25 down to 2.1%
Euro-zone annual inflation was 2.2% in March 20061, down from 2.3% in February. A year earlier the rate was 2.1%. Monthly inflation was 0.6% in March 2006. EU25 annual inflation was 2.1% in March 20062, down from 2.2% in February. A year earlier the rate was 2.1%. Monthly inflation was 0.5% in March 2006. EICP3 annual inflation was 2.1% in March 2006.
These figures come from Eurostat, the Statistical Office of the European Communities.
Inflation in the Member States
In March 2006, the lowest annual rates were observed in Poland (0.9%), Finland (1.2%), Austria (1.3%) and the Netherlands (1.4%), and the highest rates in Latvia (6.6%), Slovakia (4.3%) Estonia (4.0%) and Spain (3.9%). Compared with February 2006, annual inflation rose in seven Member States, remained stable in five and fell in twelve.
The lowest 12-month averages4 up to March 2006 were in Sweden (0.9%), Finland (1.0%), the Netherlands and Poland (both 1.5%); the highest were in Latvia (7.0%), Estonia (4.1%), Luxembourg (3.9%) and Spain (3.6%).
Euro-zone
The main components with the highest annual rates in March 2006 were housing (5.1%), transport (4.1%) and alcohol and tobacco (3.0%), while the lowest annual rates were observed for communications (-3.5%), recreation and culture (-0.1%) and clothing (0.2%). Concerning the detailed sub-indices, fuels for transport had the largest upward impact on the headline rate (+0.33 percentage points), followed by gas (+0.18) and heating oil (+0.13), while telecommunications (-0.17) and garments (-0.12) had the biggest downward impacts.
The main components with the highest monthly rates were clothing (6.3%) and alcohol and tobacco (0.6%), and the lowest were recreation and culture (-0.4%) and communications (-0.1%). In particular, garments (+0.31 percentage points) and footwear (+0.08) had the largest upward impacts, while meat, rents, accommodation services, package holidays and cars (-0.03 each) had the biggest downward impacts.
Annual inflation (%) in March 2006 in ascending order
Euro-zone Member States
FI AT NL FR DE BE IT Euro-zone IE PT EL LU ES 1.2 1.3p 1.4p 1.7 1.9 2.2 2.2 2.2p 2.8 3.0 3.3 3.7 3.9 EU Member States outside the euro-zone
PL SE DK SI UK2 EU25 CZ HU CY MT LT EE SK LV 0.9 1.5 1.8 2.0 Feb 06 2.0 2.1p 2.4 2.4 2.6 2.9 3.1 4.0 4.3 6.6 Inflation rates in %, measured by HICPs
Annual rates 12 Month average rates4 Monthly rates Mar 06 Mar 05 Feb 06 Feb 05 Jan 06 Jan 05 Dec 05 Dec 04 Mar 05 Mar 04 Mar 06-05 Mar 05-04 Mar 06 Feb 06 Belgium (BE) 2.2 2.8 2.8 2.8 2.8 2.6 -0.1 Germany (DE) 1.9 2.1 2.1 2.1 1.6 2.0 0.1 Greece (EL) 3.3 3.1 3.0 3.5 2.9 3.4 2.7 Spain (ES) 3.9 4.1 4.2 3.7 3.4 3.6 0.7 France (FR) 1.7 2.0 2.3 1.8 2.1 1.9 0.4 Ireland (IE) 2.8 2.7 2.5 1.9 1.9 2.3 0.3 Italy (IT) 2.2 2.2 2.2 2.1 2.2 2.3 1.2 Luxembourg (LU) 3.7 3.9 4.1 3.4 3.5 3.9 0.2 Netherlands (NL) 1.4p 1.4 1.8 2.0 1.5 1.5p 0.8p Austria (AT) 1.3p 1.5 1.5 1.6 2.4 1.9p 0.3p Portugal (PT) 3.0 2.9 2.6 2.5 2.3 2.3 0.5 Finland (FI) 1.2 1.3 1.2 1.1 0.9 1.0 0.3 Euro-zone (MUICP) 2.2p 2.3 2.4 2.2 2.1 2.3p 0.6p Czech Republic (CZ) 2.4 2.4 2.4 1.9 1.1 1.9 -0.1 Denmark (DK) 1.8 2.1 2.0 2.2 1.3 1.9 0.5 Estonia (EE) 4.0 4.5 4.7 3.6 4.8 4.1 0.1 Cyprus (CY) 2.6 2.3 2.0 1.4 2.4 2.0 1.2 Latvia (LV) 6.6 7.0 7.6 7.1 6.6 7.0 0.2 Lithuania (LT) 3.1 3.4 3.5 3.0 3.2 2.7 0.2 Hungary (HU) 2.4 2.3 2.5 3.3 3.3 3.2 0.6 Malta (MT) 2.9 2.3 2.4 3.4 2.6 2.6 1.1 Poland (PL) 0.9 0.9 0.9 0.8 3.4 1.5 0.1 Slovenia (SI) 2.0 2.3 2.6 2.4 3.3 2.3 0.7 Slovakia (SK) 4.3 4.3 4.1 3.9 2.4 3.2 0.0 Sweden (SE) 1.5 1.1 1.1 1.3 0.5 0.9 0.7 United Kingdom2 (UK) : 2.0 1.9 1.9 1.9 : : EU25 2.1p 2.2 2.3r 2.1 2.1 2.2p 0.5p EICP3 2.1p 2.2 2.3r 2.1 2.1 2.2p 0.5p EU15 2.1p 2.2 2.3 2.2 2.0 2.2p 0.5p Iceland 2.0 1.2 1.3 1.0 2.4 1.1 1.1 Norway 2.4 2.7 1.8 2.0 0.8 1.8 0.2 EEA (EEAICP) 2.1p 2.2 2.2 2.1 2.1 2.2p 0.5p Source: Eurostat p= Provisionalr= Revised:= Data not available
Note: Annual inflation in the USA was 3.4% in March 2006 (national CPI, not strictly comparable to the HICPs).
Euro-zone inflation rates in % for main components, measured by HICPs
Weight used in 2006 Annual rates 12 month average rates4 Monthly rates Euro-zone (MUICP) Mar 06 Mar 05 Feb 06 Feb 05 Jan 06 Jan 05 Dec 05 Dec 04 Mar 05 Mar 04 Mar 06-05 Mar 05-04 Mar 06 Feb 06 00 All-items 1000.0 2.2p 2.3 2.4 2.2 2.1 2.3p 0.6p 01 Food 152.7 1.3p 1.7r 1.7 1.4 0.8 1.0p 0.1p 02 Alcohol and tobacco 40.0 3.0p 2.5 2.6r 2.7 4.2 4.0p 0.6p 03 Clothing 72.7 0.2p -0.7 -0.8 0.3 0.1 0.0p 6.3p 04 Housing 153.5 5.1p 5.6 5.5 5.1 4.4 5.1p 0.3p 05 Household equipment 75.7 1.0p 0.8 0.7 0.8 0.8 0.8p 0.3p 06 Health 40.3 1.1p 1.1r 1.2 1.5 3.0 1.6p 0.1p 07 Transport 157.1 4.1p 4.9 5.5 4.5 4.1 4.7p 0.2p 08 Communication 29.4 -3.5p -3.4r -2.8 -2.8 -1.6 -2.6p -0.1p 09 Recreation and culture 94.7 -0.1p 0.1 0.0 0.1 0.1 0.0p -0.4p 10 Education 9.7 2.6p 2.5 2.5 2.4 3.3 2.8p 0.1p 11 Hotels and restaurants 92.3 2.4p 2.5 2.4 2.4 2.7 2.5p 0.0p 12 Miscellaneous 81.8 2.1p 1.9 1.8 2.0 1.8 1.8p 0.5p All-items excl. energy 908.0 1.3p 1.4 1.4 1.4 1.6 1.4p 0.6p -excl. energy, FoodAlcTob* 715.3 1.3p 1.2 1.2 1.4 1.6 1.3p 0.7p -excl. energy, unproc. food 833.7 1.4p 1.3 1.3 1.4 1.6 1.4p 0.6p -excl. energy, seas. food 870.6 1.4p 1.4 1.3 1.4 1.6 1.4p 0.6p -excl. tobacco 974.9 2.1p 2.3 2.4 2.2 2.1 2.1p 0.6p Energy 92.0 10.5p 12.5 13.6 11.2 8.8 11.2p 0.5p FoodAlcTob* 192.8 1.6p 1.8 1.9 1.7 1.5 1.6p 0.2p Source: Eurostat * FoodAlcTob= Food, alcohol and tobaccop= provisional r= revised
Euro-zone sub-indices with most important impacts
Weight (‰) 2006 Rate (%) Impact (percentage points) COICOP March 06 / March 05 07.22 Fuels for transport 41.7 10.1p 0.33 04.52 Gas 15.0 14.9p 0.18 04.53 Heating oil 8.8 17.9p 0.13 04.55 District heating 5.2 19.1p 0.08 02.2 Tobacco 25.1 4.6p 0.06 01.15 Oils and fats 5.5 11.3p 0.05 06.11 Pharmaceutical products 12.6 -0.8p -0.04 09.13 IT equipment 4.0 -10.8p -0.05 09.11 Audio-visual equipment 5.2 -8.6p -0.06 01.17 Vegetables 14.6 -2.4p -0.07 03.12 Garments 53.5 0.0p -0.12 08.2/3 Telecommunications 27.5 -3.9p -0.17 March 06 / February 06 03.12 Garments 53.5 6.7p 0.31 03.21/2 Footwear 14.7 6.2p 0.08 12.32 Other personal effects 5.7 3.6p 0.02 01.15 Oils and fats 5.5 2.1p 0.01 03.13 Clothing accessories 2.4 4.2p 0.01 02.2 Tobacco 25.1 0.8p 0.01 01.17 Vegetables 14.6 -1.0p -0.02 01.12 Meat 36.9 -0.1p -0.03 04.11/2 Rents 63.2 0.2p -0.03 11.2 Accommodation services 16.2 -1.2p -0.03 09.6 Package holidays 14.1 -1.8p -0.03 07.11 Cars 45.1 -0.1p -0.03 Source: Eurostatp= Provisional
Measures of inflation
The annual rate measures the price change between the current month and the same month of the previous year. This measure is responsive to recent changes in price levels but can be influenced by one-off effects in either month.
The 12-month average rate4 overcomes this volatility by comparing average Harmonized Indices of Consumer Prices (HICPs) in the latest 12 months to the average of the previous 12 months. This measure is less sensitive to transient changes in prices.
The monthly rate compares price levels between the two latest months. Although up-to-date, it can be affected by seasonal and other effects.
The impact of a particular component measures the change in the headline inflation due to the inclusion of that component in the HICP. The impact takes account of both the weight and whether the inflation for that component is higher or lower than the all-items inflation rate. For example, the impact of ‘tobacco’ is equal to the difference between the all-items inflation rate and the rate for ‘all-items excluding tobacco’. Impacts are not strictly additive.
HICPs designed for international comparison
Harmonized Indices of Consumer Prices (HICPs) are harmonized inflation figures required under Article 121 of the Treaty of Amsterdam (109j of the Treaty on European Union). They are designed for international comparison of consumer price inflation. The focus is on quality and comparability among the indices of different countries as well as on their relative movements.
Price changes as measured by the HICPs, the Monetary Union Index of Consumer Prices (MUICP), the European Index of Consumer Prices (EICP3) and the European Economic Area Index of Consumer Prices (EEAICP) are used as measures of inflation in the Member States, in the euro-zone, in the European Union, and in the European Economic Area.
The MUICP is used by, among others, the European Central Bank (ECB) as a main indicator for monetary policy management for the euro-zone (see ECB press release, 8 May 2003).
The Member States’ HICPs are supplied by the National Statistical Institutes; the MUICP, EICP and EEAICP are compiled by Eurostat. The HICP is computed as an annual chain index allowing weights to be changed each year. HICP aggregates are calculated as weighted averages of the HICPs using the weights of the countries and sub-indices concerned. The weight of a country is its share of the household final monetary consumption expenditure in the euro-zone total. For the MUICP this is expressed in euro, for the EICP and the EEAICP it is expressed in purchasing power standards. The MUICP is treated as a single entity within the EICP and EEAICP starting from 1999.
Additional information
More information on HICPs can be obtained from the monthly publication Statistics in focus, Economy and Finance, Harmonized indices of consumer prices. About 100 MUICP, EICP, EEAICP and HICP sub-indices with corresponding weights are available in Eurostat’s database.
For technical notes on HICPs see: Eurostat News Release 21/97, 5 March 1997, Harmonizing the way EU measures inflation and Eurostat Memo 8/98, 4 May 1998, New monetary union index of consumer prices (MUICP), Eurostat Memo 02/00, 18 February 2000, Improved EU Harmonized Index of Consumer Prices: Extended coverage and earlier release dates for the HICP, and HICP short guide for users. Further details can be found in the Compendium of HICP reference documents - (2/2001/B/5).
Future release dates
Provisional publication dates for the coming months are:
Index for MUICP flash estimates HICP News Releases April 2006 28 April 2006 17 May 2006 May 2006 31 May 2006 15 June 2006 June 2006 30 June 2006 17 July 2006 The MUICP flash estimate for March 2006, published on 31 March 2006, was 2.2%. Data for the United Kingdom for March 2006 were not available in time for publication. Due to this fact, EU25, EU15, EICP and EEA (EEAICP) totals were calculated using Eurostat estimates. The method used by the UK to re-reference to 2005=100 is different from that used by all other EU and EEA countries in that the UK has used unrounded index levels for rescaling and computed inflation rates from the unrounded re-referenced index series. Eurostat applied the harmonized rescaling method to UK data for calculating EU and EEA aggregates. The EICP (EICP=’European Index of Consumer Prices’ as defined in Council Regulation (EC) No 2494/95 of 23 October 1995) is the official EU aggregate. It covers 15 Member States until April 2004 and 25 Member States starting from May 2004. The ten new Member States are integrated into the EICP starting from May 2004 using a chain index formula. Measure used to determine price stability in Convergence reports of 1998, 2000, 2002 and 2004 by the Commission to the Council.The HICP Short Guide for Users, which provides essential information for all users, is available on the Eurostat website.
Issued by: Eurostat Press Office Tim ALLEN BECH Building L-2920 LUXEMBOURG Tel: +352-4301-33 444 Fax: +352-4301-35 349 eurostat-pressoffice@ec.europa.eu For further information on Methodology: João LIBÓRIO Tel: +352-4301-38 137 Fax: +352-4301-33 989 estat-hicp-methods@ec.europa.eu Eurostat News Releases on the Internet: http://ec.europa.eu/eurostat/ 
