16 February 2001, 18:10 RPT:GERMANY HICP EXPANSION CLD PUSH UP INFL. FIGURES SLIGHTLY
FRANKFURT (MktNews) - The expansion of the basket of goods and
services covered by the German harmonised consumer price index (HICP) to
include certain health and social service costs could cause the index to
be slightly higher than it would be otherwise, the Federal Statistics
Office said Friday.
Because health and social service costs have posted above average
price increases in recent years, the change will likely raise the rate
of harmonised inflation above would it would have been without these
items included, according to analysts,
The additions could ultimately raise the HICP calculation by about
0.02 percentage point, according to an estimate by Industrial Bank of
Japan analyst Ulla Kochwasser. While small by itself, this increase
could be magnified by rounding effects.
The index changes, already partly reflected in German January HICP
data, will not come into full effect until December 2001, as HICP is a
chain-weighted index, Stats Office Expert Guenther Ebel told Market News
International. On chain-weighted indexes it takes a year for the full
impact to filter through, because the thrust from the changes has a
cumulative effect of one twelfth of the final weighting each month.
Beginning with January 2001, a range of hospital services like
operations, hospital stays and nursing services as well as patients'
co-payments for hospital stays are included in German HICP with a
weighting of 0.6%.
In addition, old age nursing costs -- both in institutions and at
home -- as well as home delivery of meals to the elderly will be
included, with a weighting of 1.3% in the HICP.
The hospital services will be added to the health care subindex,
which rose 0.2% m/m in January. The other items will be included in
the subindex for "other goods and services" which rose by 0.7% m/m in
January.
The change increases the similarity between German HICP and the
national CPI, with HICP now covering 90% of the goods and services in
the national index, The only HICP category not found in national CPI are
old age nursing costs, home meal delivery for the elderly and child
creche costs.
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