January 2001 (XUR]RQHDQQXDOLQIODWLRQGRZQWR EU15 down to 2.2%

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1 1R)HEUXDU\ January 2001 (XUR]RQHDQQXDOLQIODWLRQGRZQWR EU15 down to 2.2% (XUR]RQH annual inflation fell from 2.6% in December 2000 to 2.4% in January 2001, (XURVWDW±WKH 6WDWLVWLFDO2IILFHRIWKH (XURSHDQ&RPPXQLWLHVLQ/X[HPERXUJ reports today. A year earlier the rate was 1.9%. (XUR]RQH data up to end 2000 cover the eleven Member States; with *UHHFH's entry into the euro-zone from the beginning of 2001, they cover the twelve Member States. The HXUR]RQH is treated as an entity regardless of its composition. (8annual inflation fell from 2.3% in December 2000 to 2.2% in January A year earlier the rate was 1.8%. (($annualinflation was down to 2.2% in January 2001.,QIODWLRQLQ0HPEHU6WDWHV Highest annual rates were in the 1HWKHUODQGV (4.5%), 3RUWXJDO (4.4%) and,uhodqg (3.9%); lowest rates were in the8qlwhg.lqjgrp(0.9%), )UDQFH (1.4%),and 6ZHGHQ(1.6%). Compared with December 2000, annual inflation rose in four Member States, fell in eight, and was unchanged in three. Compared with January 2000, the biggest relative rises were in the 1HWKHUODQGV(1.6% to 4.5%) and 3RUWXJDO (1.9% to 4.4%); the biggest relative falls were in 'HQPDUN (2.8% to 2.3%) and )UDQFH (1.7% to 1.4%). Lowest 12-month averages 2 up to January 2001 were in the 8QLWHG.LQJGRP (0.8%), 6ZHGHQ(1.4%) and )UDQFH(1.8%); highest were in,uhodqg (5.2%), /X[HPERXUJ (3.7%) and 6SDLQ (3.6%). 86$-DSDQDQG6ZLW]HUODQG Annual inflation fell from 1.5% to 1.3% in 6ZLW]HUODQGand rose from 3.4% to 3.7% in the86$. Data from -DSDQ are not yet available. These indices are not strictly comparable with EU harmonized indices. $QQXDOLQIODWLRQLQXDU\PHDVXUHGE\+,&3V LQDVFHQGLQJRUGHU± 8. ) 6 ' $ (8 '. (XUR ]RQH, % / ),1 *5 (,5/ 3 1/ S S S S,QIODWLRQUDWHVLQPHDVXUHGE\+,&3V 7DEOH $QQXDOUDWHV 0RQWK $YHUDJH 5DWHV 0RQWKO\ UDWHV

2 %HOJLXP r *) 2.9 *HUPDQ\ *UHHFH SDLQ )UDQFH ,UHODQG ,WDO\ /X[HPERXUJ HWKHUODQGV 4.5p p S $XVWULD 2.2p p S 3RUWXJDO )LQODQG (XUR]RQH08,&3 S S S 'HQPDUN ZHGHQ QLWHG.LQJGRP (8(,&3 S S S,FHODQG RUZD\ (($(($,&3 S S S 7KHUDWHIRU%HOJLXPZDVLQIOXHQFHGE\DRQHRIIHIIHFWDOPRVWHQWLUHO\GXHWRLQFOXVLRQRIVDOHVSULFHVLQWKHLQGH[ 6RXUFH(XURVWDW S SURYLVLRQDOU UHYLVHG 7DEOH (XUR]RQH 08,&3 :HLJKW XVHGÃLQ $QQXDOUDWHV 0RQWK $YHUDJH 5DWHV 0RQWKO\ UDWHV 00 All-items p p -0.1p 01 Food 161.9p 2.9p p 0.9p 02 Alcohol and tobacco 40.2p 1.7p p 0.7p 03 Clothing 77.4p 0.7p r 0.8p -2.6p 04 Housing 158.7p 4.9p p 0.2p 05 Household equipment 79.0p 1.5p p 0.1p 06 Health 39.0p 1.2p p -0.3p 07 Transport 156.3p 2.4p p -0.7p 08 Communications 23.2p -4.6p p -0.1p 09 Recreation and culture 95.1p 1.7p p 0.2p 10 Education 9.2p 3.2p p 0.3p 11 Hotels and restaurants 85.4p 3.0p p 0.5p 12 Miscellaneous 74.7p 2.3p p 0.7p All-items excl. energy 904.0p 1.9p r 1.4p 0.2p - excl. energy,foodalctob **) 701.9p 1.6p r 1.3p 0.0p - excl. tobacco 977.4p 2.4p p 0.0p Energy 96.0p 8.0p p -1.6p FoodAlcTob **) 202.1p 2.7p p 0.9p 6RXUFH(XURVWDW)RRG$OF7RE )RRGDOFRKRODQGWREDFFRS SURYLVLRQDOU UHYLVHG

3 %$&.*5281'127(6 0HDVXUHVRILQIODWLRQ The DQQXDO UDWH measures the price change between the current month and the same month 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 PRQWKDYHUDJHUDWH 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 PRQWKO\ UDWH compares price levels between the two latest months. Although up-to-date, it can be affected by seasonal and other effects. +,&3VGHVLJQHGIRULQWHUQDWLRQDOFRPSDULVRQ HICPs are harmonized inflation figures required under Article 121 of the Treaty of Amsterdam (109j of 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 (EICP) 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 3. 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. 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 $GGLWLRQDOLQIRUPDWLRQ More information 4 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 on Eurostat s database NewCronos through Eurostat s Data Shop network. )XWXUHUHOHDVHGDWHV Provisional publication dates for MUICP, EICP, EEAICP and HICPs for the coming months are 16 March (February HICP), 19 April (March HICP) and 16 May (April HICP). 1) The Member States participating in the euro-zone are Belgium, Germany, Greece (from January 2001), Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland. The euro-zone (MUICP) inflation is chain linked in December 2000 to include Greece starting with the January 2001 index. (See also Annex A). 2) Measure used to determine price stability in Convergence report 1998 by the Commission to the Council. 3) See ECB press release, 13 October ) For technical notes on HICPs see: Eurostat news release 21/97, 5 March 1997, +DUPRQL]LQJ WKH ZD\ (8 PHDVXUHVLQIODWLRQ and Eurostat Memo 8/98, 4 May HZPRQHWDU\XQLRQLQGH[RIFRQVXPHUSULFHV08,&3 Eurostat Memo 02/00, 18 February 2000,PSURYHG(8+DUPRQL]HG,QGH[RI&RQVXPHU3ULFHV([WHQGHGFRYHUDJH DQGHDUOLHUUHOHDVHGDWHVIRUWKH+,&3. All are available on Eurostat s Internet server. Further details can be found in &RPPLVVLRQUHSRUWWRWKH&RXQFLORQWKHKDUPRQL]DWLRQRIFRQVXPHUSULFHLQGLFHV, COM(2000)742, catalogue number KT-CO EN-C. Issued by: (XURVWDW3UHVV2IILFH )7+(,63K%$87,(5$6,0(6 -RVHSK%HFK%XLOGLQJ //8;(0%285* 7HO )D[ HXURVWDWSUHVVRIILFH#FHFHXLQW For further information: Methodology: News Releases and Euro-indicators: &DUVWHQ2/6621 HXURSDHXLQWFRPPHXURVWDW -RVHSK%HFK%XLOGLQJ Or //8;(0%285* (XURVWDW'DWD6KRS1HWZRUN 7HO List of addresses: )D[ HXURSDHXLQWFRPPHXURVWDW 6HUYLFHV_/LQNV FRQWDFWV_ (XURVWDW'DWD6KRS1HWZRUN

4 $QQH[$ 1HZGHYHORSPHQWVLQ+,&3V *UHHFHLQHXUR]RQHIURPXDU\ Greece is included in the MUICP (Monetary Union Index of Consumer Prices) starting with the January 2001 index. The index is computed as an annual chain index 1 allowing for country weights changing each year as well as allowing for inclusion of additional countries into the euro-zone. The annual rate of change for the MUICP for January 2001 will be the change from January 2000 to December 2000 for the eleven euro-zone countries combined with the change from December 2000 to January 2001 for the twelve euro-zone countries. In other words, the euro-zone is treated as an entity regardless of its composition. For analytical purposes Eurostat has made available in its data base NewCronos historic series covering the current twelve Member States of the euro-zone. The all-items annual rate for 1999 and 2000 can be found in annex D. )XUWKHUH[WHQVLRQRI+,&3FRYHUDJH In addition to the extensions of coverage implemented with the January 2000 index, some additional services are covered with the January 2001 index. These are hospital services, social protection services provided within the home, retirement homes and residences for the disabled. The weight of these new items is slightly more than one percent of the total HICP coverage but with some variation between countries as can be seen in annex C. The inclusion of these services will follow the same approach as the one used in January The country weights to be used for 2001 can be found in annex B. )XUWKHUH[WHQVLRQRI+,&3OHJDOIUDPHZRUN The HICP standards have been extended with rules on when prices observed should go into the index compilation. Prices for products will be recorded either at the time when the price is observed (for goods) or the time when the consumption can commence (for services). This may affect the seasonal pattern of some subindices. The HICP standards have also been extended with rules regarding inclusion of sales prices. This may affect index levels in certain months and will be flagged appropriately in the HICP news releases. 0RUHGHWDLOVRQLQIODWLRQFRPSRQHQWV The HICP news release has been enlarged with information on inflation rates for the 12 main consumption groups for the euro-zone while information on the EU-15 has been limited to the all-items index. The titles of the 12 main consumption groups have been abbreviated slightly. The full titles and definitions may be found in Commission Regulation (EC) 1749/1999 or in the HICP methodological notes in NewCronos. RPSRVLWLRQRILQIODWLRQUDWHV Although MUICP weights are updated every year the inflation rate can be decomposed in an additive way into the sum of the effects of the expenditure groups covered by the index. Hence, it is possible to say how much the various item-groups contribute to the total inflation rate. Eurostat will start making these time series available in the NewCronos database from March ) See also Eurostat Memo N 8/98, 4 May 1998, and Eurostat Memo N 2/2000, 18 February ) See Eurostat Memo N 2/2000 published 18 February 2000.

5 $QQH[% +,&3FRXQWU\ZHLJKWVIRUSURYLVLRQDO HICPs cover virtually all areas of household final monetary consumption expenditure. Country weights for 2001 are for the first time based on National Accounts data following ESA95 methodology, whereas country weights used up to 2000 were based on ESA79 methodology. The effect of new country weights on the allitems indices of the MUICP, EICP and EEAICP is within the rounding margin in January The weights are provisional. %HOJLXP *HUPDQ\ *UHHFH SDLQ )UDQFH ,UHODQG 11.73,WDO\ /X[HPERXUJ HWKHUODQGV $XVWULD RUWXJDO )LQODQG ,&3 (,&3 (($,&3 (XUR]RQH08,& 'HQPDUN ZHGHQ QLWHG.LQJGRP (8(,&3 *),FHODQG RUZD\ (($(($,&3 *) *) Due to rounding effects, the weights may not add up exactly to 1000.

6 $QQH[& &RYHUDJHH[WHQVLRQLQXDU\ LQRIWRWDO+,&3FRYHUDJH %HOJLXP 0.7 *HUPDQ\ 1.9 *UHHFH 1.1 6SDLQ 0.4 )UDQFH 1.6,UHODQG 0.2,WDO\ 0.5 /X[HPERXUJ 0.9 1HWKHUODQGV 2.9 $XVWULD 1.9 3RUWXJDO 0.3 )LQODQG 0.7 (XUR]RQH 1.4 'HQPDUN 0.2 6ZHGHQ 0.8 8QLWHG.LQJGRP 1.5 (8 1.4,FHODQG 0.8 1RUZD\ 0.8 (($ 1.4 $QQH[' $QQXDO,QIODWLRQUDWHVLQPHDVXUHGE\+,&3V 08,&3 (85 *UHHFH 08,&3 (85 *UHHFH Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec