Federal Department of Home Affairs FDHA Federal Statistical Office FSO Introduction of the Harmonised Index of Consumer Prices (HICP) in Switzerland Presented by Corinne Becker Vermeulen 8-9 May 2008, UNECE Joint CPI meeting

2 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO Contents 1. General conditions for introducing an HICP in Switzerland 2. Scope for adaptations 3. Impact on production process 4. Results 5. Outlook

3 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 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 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 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 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 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 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 2. Scope for adaptation

7 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 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 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 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 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 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 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 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 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 4. Results Price evolution in Switzerland is still rather low in European comparison

12 INTRODUCTION OF THE HICP IN SWITZERLAND | Corinne Becker Vermeulen Federal Department of Home Affairs FDHA Federal Statistical Office FSO 5. Outlook Annual re-weighting Follow up of price collection frequency HICP needs will influence the CPI reforms