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Introduction of the Harmonised Index of Consumer Prices (HICP) in Switzerland

This presentation by Corinne Becker Vermeulen at the UNECE Joint CPI meeting in 2008 covers the introduction of the HICP in Switzerland, including general conditions, scope for adaptations, impact on production processes, results, and the outlook. It details the conditions and adaptations necessary for implementing the HICP, as well as the impact on price collection processes and the overall results observed post-implementation. The presentation also highlights the future outlook for HICP in Switzerland, emphasizing annual re-weighting and potential CPI reforms.

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Introduction of the Harmonised Index of Consumer Prices (HICP) in Switzerland

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  1. Introduction of the Harmonised Index of Consumer Prices (HICP) in Switzerland Presented by Corinne Becker Vermeulen8-9 May 2008, UNECE Joint CPI meeting

  2. Contents • 1. General conditions for introducing an HICP in Switzerland • 2. Scope for adaptations • 3. Impact on production process • 4. Results • 5. Outlook

  3. 1. General conditions • Bilateral Agreement on Statistics between the EU and Switzerland: introduction of HICP legislation as of 2008 • First publication of Swiss results 10 years after the HICP introduction in Europe • Aim of the indicator: international comparison of price evolution, aggregation of different country groups

  4. 2. Scope for adaptation • Main criterion: comparability • Existing methods of the Swiss CPI are comparable in many fields, e.g.: calculation, annual weighting, classification, definition of prices • Main adaptations: • Coverage and weighting • Frequency of price collection • Specific adaptation of certain indicators (air tariffs, package holidays, financial services, social protection)

  5. 2. Scope for adaptation • Differences in concept entail different weighting • Sources for HICP weighting: • HBS, National Accounts, Health Statistics • Main differences of weights: • CPI – HICP: Housing (OOH included in CPI), Social protection (collective households included in HICP) • HICP CH – EU27: Health, Housing, Food

  6. 2. Scope for adaptation

  7. 2. Scope for adaptation • Different treatment of services (air tariffs, package holidays): parallel indicators for HICP and CPI • Additional indices developed for financial services and social protection • Price collection period extended

  8. 3. Impact on production process • Price collection periodicity adapted to HICP regulation • Up to 2007: only prices of fresh food and fuels collected monthly • As from 2008: most positions collected monthly • Prices collected annually increase from 360’000 to 600’000 • Most prices enter both indicators

  9. 3. Impact on production process • Strategy for introduction of monthly price collection: • Early preparation of IT application, early recruiting • Strict separation of price collection from calculation • Inclusion / exclusion of items defined in calculation module • Information of the change in frequency: public, enterprises • The impact of the new frequency will be analyzed

  10. 4. Results • Base year: 2005, calculation of results 2005 to 2007 according to HICP methodology as far as possible • Introduction as of 2008, publication primarily by Eurostat • Difficulty: communication of differences CPI – HICP; differences on all aggregated levels, mainly in the headings for Housing and energy, Restaurants and hotels and Miscellaneous goods and services • Between 2006 and 2008, differences in annual and month- ly rates never exceeded 0.2% and were not systematic

  11. 4. Results Price evolution in Switzerland is still rather low in European comparison

  12. 5. Outlook • Annual re-weighting • Follow up of price collection frequency • HICP needs will influence the CPI reforms

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