Consumer price indices 
2011 02 14
PRESS RELEASE

CHANGES IN PRICES FOR CONSUMER GOODS AND SERVICES IN JANUARY 2011
OVER A MONTH, THE GREATEST PRICE INCREASE – 1.6 PER CENT – WAS OBSERVED IN PRICES FOR TRANSPORT GOODS AND SERVICES, WHILE PRICES FOR FOOTWEAR AND CLOTHING DROPPED BY 6 PER CENT

Statistics Lithuania informs that in January 2011, against December 2010, prices for consumer goods and services increased by 0.4 per cent. The change in prices was mostly determined by an increase in prices for food products and non-alcoholic beverages, transport goods and services, housing, water, electricity, gas and other fuels group of goods and services, as well as by a decrease in prices for clothing and footwear.

In January 2011, against December 2010, prices for consumer goods increased by 0.5 per cent, while prices for services remained almost unchanged.

A monthly change in prices for food products and non-alcoholic beverages was mostly determined by a 5.7 per cent increase in prices for fruits and berries, 1 per cent – milk and its products, cheese, eggs, 0.7 per cent – bread and cereals, 2.5 per cent – coffee, tea, cocoa, 1.6 per cent – vegetables and potatoes, 2.2 per cent – butter, oils and fats.

A change in prices for transport goods and services was mostly influenced by a 2.9 per cent increase in prices for fuel (prices for petrol grew by 2 per cent, diesel fuel – 4.4 per cent, liquefied gas – 5.3 per cent), 6.2 per cent – passenger transport by rail, 0.7 per cent – motor cars, as well as by a 5.2 per cent decrease in prices for passenger transport by air.

Changes in prices for housing, water, electricity, gas and other fuels group of goods and services were mostly determined by a 14.9 per cent increase in prices for solid fuel, 5.1 per cent – liquefied gas for cooking, as well as by a 6.2 per cent price drop in prices for natural gas.

Changes in prices for clothing and footwear were influence – due to seasonal discounts – by a 6.7 per cent price drop in prices for clothing, 5.2 per cent – footwear.

In 2011, the annual inflation (January 2011, against January 2010) stood at 2.9 per cent. The annual change was determined by an increase in prices for food products and non-alcoholic beverages, transport goods and services, housing, water, electricity, gas and other fuels group of goods and services, as well as by a decrease in prices for clothing and footwear, communication goods and services, furnishings, household equipment and routine maintenance of the house goods and services.

Over a year, prices for consumer goods grew by 3.9 per cent, while prices for services dropped by 0.2 per cent.

Table 1. Rates of change in prices for consumer goods and services, January 2010
Per cent 

Table 2. COICOP classes of consumer goods and services whose rates of change in prices had a decisive influence on the overall price change over the month 
(January 2011, against December 2010) 

INFORMATION ON THE REVISION OF THE SYSTEM OF WEIGHTS

Statistics Lithuania annually revises the weighting system, used for the calculation of the Consumer Price Index (CPI), and updates it taking into consideration the changes in the structure of household consumption expenditure.

The new weighting system for the CPI (see Table 1) is based on the data of 2008 (reference period of weights) household budget survey on monetary consumption expenditure, industry, domestic and foreign trade, transport and services, energy statistics, as well as other institutions’ information. Available statistical information of 2010 is also used.

The price reference period is December 2010, i.e. in 2011 each month’s prices will be compared against this period’s prices. According to the Laspeyres formula, applied to the calculation of the CPI, data on weights and prices in the reference periods have to be consistent. Therefore, the statistical data on consumption expenditure in cash 2008 were updated up to December 2010 using respective CPIs, and a new weighting system for the calculation of the 2011 CPI was developed. For the calculation, the weights were used with the accuracy to the fifth decimal place.

The weighting system developed for the calculation of the 2011 CPI was conditioned by the changed structure of household consumption, which was due to the change in prices of consumer goods and services, increase in earnings and pensions. The most significant changes in the weighting system were as follows: the increase in the specific weight of consumption expenditure on food products and non-alcoholic beverages (the greatest increase was observed in expenditure on vegetables and potatoes, milk and its products, cheese, eggs, the decrease in expenditure was observed in prices for meat and its products) – by 0.9 percentage points, housing, water, electricity, gas and other fuels products and services – by 0.8 percentage points; the decrease in the specific weight of consumption expenditure on recreation and culture goods and services – by 0.6 percentage points, communication goods and services – by 0.4 percentage points.

The current weighting system covers 514 elementary aggregates of household consumption expenditure. These elementary aggregates are further specified using additional sources of information (information of other statistical areas and institutions) to the level of representative goods and services. In the CPI, elementary aggregates of household consumption goods and services are represented by 889 goods and services.

INFORMATION ON CHANGES IN METHODOLOGY

From January 2011, the Statistics Lithuania applies the standards for the treatment of seasonal products in the Harmonised Indices of Consumer Prices (HICP) set in Commission Regulation (EC) No 330/2009 of 22 April 2009.

More information on the provisions and minimal standards and the implementation thereof of the Commission Regulation (EC) No 330/2009 is available at the website of Statistics Lithuania.
Concepts
Inflation – a decrease in the purchasing power of a currency unit, which manifests itself in a long-term increase in the average general price level.
Annual inflation shows relative changes in the average price rate between the current month and the corresponding month of the previous year. 
Average annual inflation shows relative changes in the average price rate between the average of the latest twelve months and the average of the corresponding previous twelve months.
COICOP – Classification of Individual Consumption by Purpose.

A press release on the February 2011 CPI is due on 8 March 2011.