Kosovo Agency of Statistics (KAS)

Department of Economic Statistics - Division of Price Statistics

KOSOVO AGENCY OF STATISTICS

Street. 'Zenel Salihu', No. 4, 10000, Pristina

The harmonised index of consumer prices (HICP) is a consumer price index (CPI) that is calculated according to a harmonised approach. It measures the change over time of the prices of consumer goods and services acquired by households (inflation).

Due to the common methodology, the HICPs of the countries and European aggregates can be directly compared.

European classification of individual consumption according to purpose (ECOICOP)

The HICP covers the final monetary consumption expenditure of the household sector.

The main statistical variables are price indices.

The basic unit of statistical observation are prices for consumer products.

3.6.1. Statistical target population

The target statistical universe is the 'household final monetary consumption expenditure' (HFMCE) on the economic territory of the country by both resident and non-resident households. The household sector to which the definition refers, includes all individuals or groups of individuals irrespective of, in particular, the type of area in which they live, their position in the income distribution and their nationality or residence status. These definitions follow the national accounts concepts in the European System of Accounts.

3.6.2. Coverage error population

The target population of the Kosovar HICP cover all households (including resident and non-residents) in all national economic territory

3.7.1. Geographical coverage

The HICP refers to the economic territory of a country as referred to in paragraph 2.05 of Annex A to ESA 2010, with the exception that the extraterritorial enclaves situated within the boundaries of a Member State or a country are included and the territorial enclaves situated in the rest of the world are excluded.

3.7.2. Coverage error regions

Prices are collected (seven regional offices) in 14 large municipalities with about 70 percent of the population of the country’s (approximately 1.8 million) in the urban parts of the municipalities prices are collected for all items, but in the rural parts only food items are collected (The HICP is not stratified by region, but all regions are included in the sample).

3.8.1. Start of time series

The HICP series started in January 1997.

3.8.2. Start of time series - national specifics

See the HICP database

With the index of December 2014, new weights largely based on National Accounts data were introduced bringing the coverage of the CPI more into line with European Harmonised Index of Consumer Prices. As such the CPI from December 2014 is in effect an HICP.

To reflect this, from the January 2015 index, the CPI was renamed to HICP. 

(Actually we are in process of implementation of HICP without CT).

2015=100

The following units are used:

• Index point
• Percentage change on the same period of the previous year (rates);
• Percentage change on the previous period (rates);
• Percentage share of the total (weights).

HICP is a monthly statistics.

Harmonised Indices of Consumer Prices (HICPs) are harmonised inflation figures required under the Treaty on the Functioning of the European Union. Regulation (EU) 2016/792 of the European Parliament and the Council of 11 May 2016 (OJ L 135) sets the legal basis for establishing a harmonised methodology for the compilation of the HICP and the HICP-CT.

This regulation is implemented by Commission Regulation (EU) 2020/1148 of 31 July 2020.

Further documentation, can be found in Eurostat’s website - HICP dedicated section, namely recommendations on specific topics, under the methodology page, and guidelines, under the quality page.

None.

Based on the Law No.04/L-036 of 12 December 2011, confidentiality of statistical products is guaranteed in accordance with EU standards.

SIDA-KAS has built a new HICP system in visual basic 6 and SQL, which it was tested during year 2013 and from January 2014 is used for the CPI-HICP calculation of price indexes.

SIDA-Eu Office supported on the modifications requested by HICP IPA2019 expert recommendation on the HICP application.

The system is run on SQL server data base, which provides a stable platform for it.

The HICP is an annually chain-linked Laspeyres –type index.

Jevons - Geometric mean

Elementary indexes (indexes for the elementary aggregates) are compiled from collected prices using the unweighted-geometric-average (Jevons) formula. The confidentiality of data providers (households, enterprises, administrations and other respondents) is absolutely guaranteed by Law. The data are used only for statistical purposes and are published in aggregate level.

In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see point 10 - 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Protocol on impartial access to Eurostat data for users.

The HICP is released according to Eurostat’s Release calendar.

The calendar is publically available and published at the end of the year for the full following year.

Agjencia e Statistikave të Kosovës (rks-gov.net)  (Publication calendar/Theme: Prices and inflation)

The general policy is that before publishing statistics on the Kosovo Agency of Statistics web site a press release is available, also on the web site, to inform users and media. All users get access to data at the same time.

Monthly

The HICP is disseminated with one decimal (100.0).

The publications are in Albanian, English and Serbian language.

KAS publications, tables and material for press release are always available in three languages: Albanian, English and Serbian. The all-items HICP and detailed HICPs (for the 12 ECOICOP Divisions) are made available and first released in a special publication called 'First Release': https://askweb.rks-gov.net/en/kosovo-agency-of-statistics/add-news/harmonized-index-of-consumer-prices-hicp-june-2023. 

Data on statistics are also published in the KAS Statistical Yearbook: Statistical Yearbook | (rks-gov.net)

KAS online database: AskData (rks-gov.net)

The index series are also available on Eurostat and IMF websites.

Users do not have direct access to micro-data, but by law researchers and institutions can request access through KAS.

Data on statistics are also published in the KAS Statistical Yearbook: Statistical Yearbook | (rks-gov.net)

The HICP Methodological Manual provides the reference methodology for the production of HICP. (https://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/-/KS-GQ-17-015)

10.6.1. Documentation on methodology - national specifics

A brief explanation of the definitions, key concepts and methodological explanations for users is presented in the publication of data:

• Harmonised Index of Consumer Prices May 2023

• Harmonised Index of Consumer Prices, Series 5: Economic Statistics, 2023

KAS is committed to quality assurance in the production of official statistics.

Price Division developed a HICP Road map September 2018 'IPA 2015 project', HICP Inventory 2017/2019, Report on the Consumer Price Index Mission (February 25–March 8, 2013), prepared by IMF, ESMS metadata.

Not available.

11.1.1. Quality management - Compliance Monitoring

Compliance Monitoring

11.1.2. Quality assurance - national specifics

KAS is committed to quality assurance in the production of official statistics. Based on the 'Law On Official Statistics, Law 04 / L-036',while from 17th of January 2019 was approved and signed the 'LAW No. 06 / L-058 ON AMENDMENT AND SUPPLEMENTATION OF THE LAW No. 04 / L-036 ON OFFICIAL STATISTICS OF THE REPUBLIC OF KOSOVO'

KAS uses statistical methods and processes in accordance with internationally accepted scientific principles and standards and conducts ongoing analyses in order to improve the quality and delivery of updated statistics. In carrying out its duties, KAS follows the overall quality management principles, in line with the European Statistics Code of Practice. 

11.2.1. Compliance monitoring - last report and main results

Not applicable.

11.2.2. Quality assessment - national specifics

During July 2017 in Kosovo Agency of Statistics was conducted the process of assessment of the Kosovo Statistical System through the 'Peer Review' approach.

The quality of HICP can be assessed to be satisfactory and it is largely compliant with HICP regulations. Its concepts and methodology have been developed according to international standards and using consumer price statistics experience.

Further work is ongoing to improve the quality and in particular comparability of the index. In particular, the HICP in Kosovo is still under development.

In addition to being a general measure of inflation, the HICP is also used in the areas of:

• wages, social benefit and contract indexation;
• economic forecasting and analysis;
• measuring specific price trends;
• accounting purposes and deflating other series;
• inflation targeting by central banks;
• cross-country economic comparisons.

The euro area (evolving composition) index is used by the European Central Bank (ECB) as the main indicator for monetary policy management. The ECB and the European Commission's Directorate-General for Economic and Financial Affairs (DG ECFIN) use the HICP for assessing price stability and price convergence required for entry into European Monetary Union.

Other users include: National Central Banks, financial institutions, economic analysts, the media and the public at large.

12.1.1. User Needs - national specifics

Generally, HICPs are in particular suited for cross-country economic comparisons. The main users, apart from those above, include National Central Banks and other financial institutions; economic analysts, media and public at large.

KAS has not conducted a specific HICP user satisfaction survey.

All statistics that are required by international standards are calculated. HICP covers more or less all the groups and subgroups of the ECOICOP/HICP classification, which share in total consumption is greater than 0.1%.

The goods and services selected for the basket are those of most importance to the customers; have a significant share in total consumption and reflect the changes of prices of related products. As far as possible, methodological recommendations are taken into account; however, the HICP in Kosovo is still under development.

Prices are collected in different types of outlets, supermarkets, markets, etc., in 14 municipalities in the country, some of them also via the internet and by phone-centrally. They reflect the price situation for the whole country. Higher level published weights are based on the data from household final monetary consumption expenditure structure; unpublished weights at the most detailed level are derived from the HBS. HICP weights for the year 2016 are based on the NA data 2014, for year 2017 are based on the NA data, reference year 2015, for year 2018 are based on the NA data 2016, January 2019 the HICP index calculations are based on the structure of NA data 2017, from January 2020 the HICP Index calculations are based on the structure of NA data 2018, while from January 2021 the HICP Index calculations are based on the structure of NA data 2019.

Weights for 2023 are calculated using NA data, reference year 2020/2021. (Preparing and calculation of the weights were supported by the HICP 'IPA2019' - technical  expert).

The outlets from which prices are collected are chosen to represent the existing trade and service network. Private households are included irrespective of their income.

 Not relevant as the sample is purposive.

Price statistics Division (KAS) is trying to reduce non-sampling errors through continuous methodological improvements and survey process improvements (price collection is still done traditionally).  

Unit Non-Response Rate Retail prices of selected representative products and services used to calculate the CPI and now the HICP are monitored at selected outlets (e.g. shops, markets, craftsmen and other organisations). At the points of sale, which were selected in the sample at the beginning of the year, each month information on prices should be obtained, since the number of sales locations during the year should not be changed. Therefore, each month we aim to have 100% response of units. Item Non-response Rate In the case of item non-response similar methodological limitations are valid as in the case of unit non-response. The number of prices which will be collected for the selected product at selected outlets shall be determined at the beginning of the year and generally does not change, except for retail prices of seasonal products. In the latter case, the price is only collected in those months when they are sold on the market (i.e. during the season). If an item in a particular outlet disappears, these are replaced by the price collectors following written procedural guidelines.

The full set of HICPs is published each month according to Eurostat’s Release calendar, usually between 15 and 18 days after the end of the reference month.

Each year, the January release is published at the end of February to allow for the annual update of the weights, both of individual product groups and the relative country weights of Members States in the country group aggregates.

The euro area flash estimate is published on the last working day of the reference month or shortly after that.

Since the March 1997, launch of the HICP release, the HICP for the country groups aggregates has always been published on the dates announced in Eurostat’s Release calendar.

HICPs across Member States aim to be comparable. Any differences at all levels of detail should only reflect differences in price changes or expenditure patterns.

To this end, concepts and methods have been harmonised by means of legislation. HICPs that deviate from these concepts and methods are deemed comparable if they result in an index that is estimated to differ systematically by less than or equal to 0.1 percentage points on average over one year against the previous year (Article 4 of Council and Parliament Regulation (EU) 2016/792).

Not available.

Since Kosovo HICP is based on the harmonised definitions and classification stipulated in a series of legal acts it should, in KAS opinion, be considered comparable to the HICPs of other EU countries.

Data are flagged 'Definition differs' in Eurostat's database.

The HICPs are internally coherent. Higher level aggregations are derived from detailed indices according to well-defined procedures.

Not available

The HICP series, including back data, is revisable under the terms set in Articles 17-20 of Commission Implementing Regulation (EU) 2020/1148.

17.1.1. Data revision - policy - national specifics

There is no revision policy at KAS.

An index revision was done in 2006 and its explanation documented in the CPI publication in January 2007.

The index of CPI for Kosovo has been revised for the period May 2002 to December 2006. This was due to the correction of the methodological error included from the start in May 2002. 

For 2006 the inflation rate is approximately the same in the revised index as in the published indices. Although the index level is lower in 2006 for the revised index due to chain into previous years.

This improvement is done in cooperation and with experts from Statistics Sweden, experts from International Monetary Fund and price experts from Kosovo Agency of Statistics.

18.1.1. Weights

Each month the HICP is calculated in two steps:

1. Elementary indices (elementary aggregate indicator) calculated from the collected prices by using the formula of unweighted geometric average (Jevon).

2. The indices of the highest level, including the HICP itself, are calculated by averaging the elementary indices by formula of weighted arithmetic average (Laspeyres).

   By E-COICOP, KAS has allocated 91 classes of defined consumption (at 5-digit level) further to 418;products (elementary aggregate).

The frequency of update of weights is annual (t-2).

18.1.1.1. Compilation at elementary aggregate level

Each month the HICP is calculated in two steps:

1. Elementary indices (elementary aggregate indicator) calculated from the collected prices by using the formula of unweighted geometric average (Jevon).

2. The indices of the highest level, including the HICP itself, are calculated by averaging the elementary indices by formula of weighted arithmetic average (Laspeyres).

   By E-COICOP, KAS has allocated 91 classes of defined consumption (at 5-digit level) further to 418;products (elementary aggregate).

The frequency of update of weights is annual (t-2).

18.1.1.2. Compilation of sub-index weights

For calculating elementary aggregate weights judgement, HBS, NA and other relevant limited sources are used.

18.1.1.3. Compilation of sub-index weights

Weights for 2023 are calculated using NA data, reference year 2020/2021. (Preparing and calculation of the weights were supported by the HICP 'IPA2019' - technical  expert).

18.1.1.4. Weights – plausibility checking

Not available.

18.1.1.5. Price updating

Price-updating between t-2 and t-1 to make the expenditure shares representative for t-1 is done. Prices are updated to the previous year's December price level.

18.1.1.6. Compilation of total household final monetary consumption expenditure

Not available.

18.1.2. Prices

Sample size (referring to year 2019):

No of price observations per month: 6 710 

01 Food and non-alcoholic beverages  2774

02 Alcoholic beverages, tobacco  354        

03 Clothing and footwear   458

04 Housing, water, electricity, gas and other fuels  251

05 Furnishings, household equipment and routine household maintenance 829

06 Health 344

07 Transport 241

08 Communication  94

09 Recreation and culture  504

10 Education 47

11 Restaurants and hotels 225

12 Miscellaneous goods and services 589

Number of representative products (goods and services) (referring to 2019)

All items: 415

01 Food and non-alcoholic beverages  107 

02 Alcoholic beverages, tobacco  14 

03 Clothing and footwear  37

04 Housing, water, electricity, gas and other fuels 17

05 Furnishings, household equipment and routine maintenance of the house 57

06 Health  26

07 Transport 38

08 Communication 8

09 Recreation and culture 46

10 Education 5

11 Restaurants and hotels 18

512 Miscellaneous goods and services 42

Number of observation points (reference year 2019):  919

18.1.2.1. Data Source - overview  

The sample covers different types of outlets from market stalls, craft undertakings, traditional shops, single-line retail shops, big shopping centres, restaurants and hotels as well as Internet shops and catalogues. Prices for fresh fruit and vegetables, fishes, flowers are collected at open market stores in addition to supermarkets and traditional shops. Prices for PCs, used cars, air plane tickets and some books are collected in Internet shops. Prices for package holidays are collected through catalogues via internet and prices for some pharmaceutical products are collected through a pharmacy shops.

The current practice is to estimate the rent per square meter of one hypothetical rental unit of 60 square meters rented to the domestic market. Only rents for flats in seven municipalities are included as price observations in HICP.

More than 65% of all prices are collected in a traditional way, i.e. in the field from shops; some prices are collected centrally.

18.1.2.2. Scanner data - general information

Traditional price collection (no scanner data were used).

18.1.2.3. Web scraping - general information

Not applicable.

18.1.3. Sampling

18.1.3.1. Sampling design: locations for survey

The sample design is based on 7 regions which cover 14 municipalities (for food, both Urban and Rural areas are used).

18.1.3.2. Sampling design: outlets

The main criteria for selection of outlets in each locality are the coverage of the available shopping areas within each location and the representation of different types of outlets.

The number of outlets sampled varies by size of locality and by the type of item being priced.

The sample covers different types of outlets from market trade, open trade market, specialised shops, big shopping centres, restaurants and hotels as well as internet shops and catalogues. Prices for fresh fruit and vegetables are collected also from open market in addition to supermarkets and traditional shops.

Prices for mobile phone packages are collected via the internet.

All the Food and non-alcoholic beverages, Clothing and footwear, Maintenance and repair of the dwelling, Furnishing, household equipment and routine maintenance of the house, Education, Restaurants and hotels, are collected in a traditional way, i.e. in the field from outlets. Some of prices are collected centrally such as; Electricity, water, internet connection services, telephone services, and subscriptions to TV networks, car and health insurance, transport services by bus and railway, kindergarten services, university fees.

The outlets are chosen by KAS staff, generally by the central office staff in consultation with the local supervisor and data collectors. The general practice is to collect the prices in the largest market and stores in the dedicated municipality.

The sample was established 15 years ago, however it is updated every year, it is based on the original CPI sample - the CPI is no longer calculated.

18.1.3.3. Sampling design: newly significant goods and services

From December 2007 until December 2019 the basket was expanded from 383 (year 2018=408) products to 418 products, mainly small household appliances, solid fuels, mobile telecom services, travel insurance, additional new car models and poultry and frozen vegetables to the food groups, etc. Prices for strongly seasonal products such cherries, plums, tangerine, pomegranate and melons which they were collected in the previous years, are included into the index during year 2019.

Price data is collected every month.

18.3.1. Price collection surveys

Price collection is carried out by the price collectors (visiting outlets face to face) in seven regional offices which they cover 14 municipalities via a questionnaire (printed hardback book) for articles and services.

The questionnaire is printed in hard copy and contains the guidelines for price collections. The instructions to price collectors and the format of the questionnaire were updated for January 2019.

Also from the central head price office regularly are collected prices for electricity, water supply, postal and telecommunication services, package holidays, university fees, health services and second hand cars.

The observation by the price collectors is recorded in the outlets. Some validation is undertaken by the regional offices. In 2018, head office staff began visiting the five regional offices to support their validation procedures.

18.3.2. Timing of price collection

Price collection timing;

Kosovo has 10 price collector posts these are supported by the seven chiefs of regional offices. There is a pricing form for each observation that is used for a full calendar year’s data collection (Jan-Dec). The collection forms are bound in hard-back books, with one or more books for each data collector each year. For the data collectors’ reference there are written data collection instructions in the front of each collection book (updated in January 2019). However, the extent to which these instructions are followed varies considerably between price collectors.

The data collectors collect the prices between the 10th and 20th of the month. The data collectors also work on other surveys during the rest of the month. The data collectors come to the central office twice a month to get and return the data collection books, the national office can thus supervise the price collectors.

KAS central-office staff enters the collected prices into a SQL-server-based data entry system.

Data quality checks and validation are distributed between the central office and regional statistical offices, but most of the data are edited at national level by the HICP staff in Price Statistics Division (KAS).
The data validation process at regional offices can be divided into two stages. The first one takes place during the entering of the collected prices into the computer system, the second stage includes checking and validating by specialists in regional statistical offices and if necessary, prices are cross-checked in outlets.
The data are validated at the central office after the first index is calculated. The prices are checked and validated by HICP staff and Head of price statistics.

Data quality checks can be subdivided into validation of: changes in the relevant index (extreme and unusual price levels/changes); missing prices; replacement of outlets; changes in product specifications; changes in fresh product prices, etc.
In this validation process there is no automatic rejection of observed prices. Each problematic price is considered individually and any necessary modifications are made only on the basis of relevant information.

Additional note:

During the year 2023 there were problems with HICP application. The modification was done in application and this caused delay in implementing IPA 2019 HICP activities, particularly implementing of the HICP-CT. These activities probably will be postponed for the next year (2024).

Due to modification process, KAS were not able to update HICP Metadata as is planned.

18.4.1. Data validation - price data

Not available.

18.5.1. Elementary price index formulae

Index formulae are explained in HICP methodological description.

18.5.2. Aggregation of different data sources

Not available.

18.5.3. Chaining, linking and splicing methods

Not available.

18.5.4. Quality adjustment – Detailed information

Regarding quality adjustment for both Implicit quality adjustment and Explicit quality adjustment the application of 'CASES' is used, these are routines within the HICP-IT application.

Hedonic quality adjustment method is not applied.

When we are unable to collect a price or unable to use a collected price, Kosovo carries the previous price forward for up to two months, if the price is missing in the third month it is replaced and the appropriate quality adjustment using 'cases' is applied if there is sufficient evidence to do this.

18.5.5. Seasonal items

Seasonal products such as cherries, plums, tangerine, pomegranate and melons which they were collected in the previous years, are included into the index calculation during year 2019.

Not applicable.

None.