Central Statistical Bureau of Latvia (CSB)

Consumer Price Indices Section

1 Lacplesa Street

Riga LV 1010

LATVIA

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.

See next points.

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.

No deviations from the target population.

See next point.

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.

HICP covers the entire area of the country. 

The sample of towns is formed so, that it covers all the territory of the country and price dynamics is representative for the majority of the population in the region. In the HICP calculation, the weight for each town is based not only on the population of town itself, but also of the area it represents. All the population of Latvia is distributed between the cities and towns in the sample.

See next points.

The HICP series started in January 1997.

See the HICP database.

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.

All the HICP legislation can be found in the HICP decicated section in Eurostat's website: Legislation - Eurostat (europa.eu).

Further documentation, namely recommendations on specific topics, can be found in the Methodology page.

None.

The rules applied for treating the data set with regard to statistical confidentiality are described in the Section 17 of Statistics Law.

Legal basis:

• Regulation (EC) No 223/2009 of the European Parliament and of the Council, of 11 March 2009, on the transmission of data subject to statistical confidentiality to the Statistical Office of the European Communities;
• Nacional Statistics Law

Data are published in aggregated form and don't allow statistical units to be identified, either directly or indirectly.

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 Eurostat 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.

Harmonised consumer price index Advance dissemination calendar (Central Statistical Bureau of Latvia).

The release calendar is publically available on the Official statistics portal homepage.

Data are made available to all users simultaneously.

There are no specific users that are granted special or pre-access to HICP data.

Monthly.

For data users, HICP indices are available in the Official statistics portal database (database is available in Latvian and English). HICP rates are published with 1 decimal, while HICP indices are published with 2 decimals. No news release is issued for HICP.

HICP Flash Estimates are not published.

No news release is issued for the HICP.

The HICP is published in the Official statistics portal database.

HICP data available in Official statistics portal of Latvia.

HICP micro-data are not disseminated. 

None.

The HICP Methodological Manual provides the reference methodology for the production of HICP.

HICP metadata are available on the Official statistics portal of Latvia.

Reports about HICP compliance monitoring which was carried out in July 2007, March 2013 and April 2022 are available on Eurostat's web page: Quality - Harmonised Indices of Consumer Prices (HICP) - Eurostat (europa.eu).

CSB has introduced Quality Management System (QMS). The system is directed towards providing high user satisfaction and ensuring compliance with regulatory enactments. Based on the structure of Generic Statistical Business Process Model (GSBPM), QMS defines and at the level of procedures describes processes of statistical production as well as sets the persons responsible for the monitoring of processes at all stages of the statistical production. QMS defines the sequence how processes are implemented (i.e., activities to be performed (including verifications of processes and statistics, sequence and implementation requirements thereof, as well as persons responsible for the implementation)), procedures used in the evaluation of processes and statistics, as well as any improvements needed.

Since 2018, QMS of the CSB has been certified by the standard ISO 9001:2015 'Quality Management Systems. Requirements' (certified scope: Production of official statistics – planning, development, data acquisition, processing, analysis and dissemination).

See next points.

Compliance Monitoring.

Controls on the quality of the data
Eurostat carried out a HICP compliance monitoring in July 2007 and published a report in September 2007. The report contains several recommendations that were followed up. In March 2013 repeated compliance monitoring visit took place and afterwards most recent compliance monitoring visit happened in April 2022.

The CPI unit has developed a software and computerised system for the automated receipt, processing, and aggregation of data, as well as for checking the consistency of reports with the given criteria and verifying the logical and accounting consistency of the reports.

After data entry into the database data are checked manually in case-by-case approach. Main checks performed regarding correctness of prices entered by price collector, product descriptions, explanatory codes for price changes, products chosen in case of substitution, application of the relevant quality adjustment method, crosschecks between towns, within certain consumption groups as well as comparison to the general market trends. Also information on tax, tariff, excise duties and legislation is followed carefully. If there are additional questions or a need to correct any input mistakes, then price collector is contacted, and necessary corrections are made. After the manual checks for all prices in the month, additional analysis of the higher-level indices is made.

Staff of CPI unit constantly reviews the individual and aggregate indices to check that the price movements are in line with market information.
Supervisors from the CPI unit take a random or targeted audit of individual price collectors.

See next points.

The last available compliance or follow-up report can be found in the dedicated HICP section ‘Compliance Monitoring’ of Eurostat’s website, under 'Quality'.

Refer to Eurostat's Compliance Monitoring Reports of 2007, 2013 and 2022 (see point 11.1).

HICP concepts and methodology have been developed according to international standards and using consumer price statistics experience from other EU Member States. HICPs are considered to be sufficiently accurate for all practical purposes they are put into.

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.

The HICPs are used as secondary (complementary) indicator for general measure of inflation in the country. The main users are Bank of Latvia and Central Government (Ministry of Economics and Ministry of Finance). HICP has an interest of public media and economic analysts as well.

The mission of the CSB is to provide users of statistical information with independent high-quality official statistics for decision-making, research and discussions. You can provide your opinion on data quality to e-mail: pasts@csp.gov.lv

Indices are calculated and transmitted to Eurostat for all ECOICOP categories of goods and services for which there are significant expenditures according to NA and HBS data, or represent at least one part in a thousand of the total expenditure.

The accuracy of source data is monitored by assessing the methodological soundness of price and weight sources and the adherence to the methodological recommendations.

There are no numerical estimates of HICP sampling errors because they are difficult to quantify due to the complexity of price index structures and due to the common use of non-probability sampling.
The sampling errors may be reduced by using a sample of consumer prices that is as large as possible.

For the HICPs non-sampling errors are not quantified.

Non-sampling errors have been reduced through continuous methodological improvements.

The full set of HICPs is published each month according to a pre-announced schedule, usually between 15 and 18 days after the end of the reference month. Each year, the January news release is published at the end of February to allow for the annual update of the weights 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 pre-announced release dates.

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).

HICP data are fully comparable over time. There have been several improvements in methodology since HICP was introduced with the aim of improving reliability and comparability of the data series. Impact from the changes in the methodology has been assessed through parallel calculation of the index (e.g. in case of implementation of the requirements regarding the treatment of seasonal items).

Differences between the HICP and national CPI

The following expenditure is included in the HICP but excluded from the national CPI: consumption expenditure of non-residents in the economic territory of the country.
Gambling and games of chance are included in the national CPI but excluded from the HICP; expenditure of residents abroad are included in the national CPI.

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.

HICP series are revisable under the terms set in Implementing Regulation (EU) 2020/1148. 

During the rebasing exercise of index reference period there were some revisions of published rates of change due to rounding effects.

See next points.

At ECOICOP 5-digit level, weights used in the current year are based on annual HFMCE data of the previous year, estimated in line with the domestic concept. HFMCE is obtained from provisional NA data for the first three quarters of the previous year.

To derive weights for the year 2024 data from NA for the three quarters of the year 2023 and fourth quarter as an average of the three available ones were used.

In addition, retail trade statistics, tourism and transport statistics, public financial and operational reports of the enterprises, information on client structures for certain services and other information that could give additional impression about the consumption pattern changes was used.

The weights are updated annually and price-updated to December t-1.

The weights derived from the National Accounts are used for ECOICOP 5-digit sub-class level and for elementary product groups the HBS data and additional sources are used. In several cases internal weights are applied to take into account market shares and client structures.

The weights are updated annually and price-updated to December t-1.

For Riga and 10 other towns, which are included in the consumer price survey, population weights are used. Using population weights survey data are generalized on all country: on both urban and rural territories. Last update was based on Census 2021.

There is not a system of weights for outlets

To derive weights for the year 2024 data from NA for the three quarters of the year 2023 and fourth quarter as an average of the three available ones were used. NA data were complimented by branch statistics data, private sector operational reports information as well as other relevant information on sub-class or individual product in the sample. In most recent weight update expenditure shares refer to year t-1 and are price updated to December t-1.

As main source NA data for three quarters of the year 2023 and fourth quarter as an average of the three available ones is used. In addition, retail trade statistics, tourism and transport statistics, public financial and operational reports of the enterprises, information on client structures for certain services and other information that could give additional impression about the consumption pattern changes was used.

The largest increases in weights were found in division 12, ‘Miscellaneous goods and services’ and division 06, ‘Health care'. The main driver for the increase in division 12 was sub-group 12.1.3 ‘Other appliances, articles and products for personal care. For division 06, the main driver for the increase was sub-group 06.1.1 ‘Pharmaceutical products’.

The largest decreases in weights were found in division 04 ‘Housing, water, electricity, gas and other fuels’, and 07 ‘Goods and services related to transport’. For division 04, sub-groups 04.5.5 ‘Heat energy’ and 04.5.1 'electricity' were the main drivers while for division 07, sub-group 07.2.2 'Fuels for transport' influenced decrease the most.

Price-updating between year t-2 and t-1 was not applied since data used for the 2024 weights calculation either from NA or other public or administered sources refer to the year 2023. Price-updating to December t-1 was applied.

Expenditure values for t-1 derived from NA data and complimented by all the relevant data source information to make the best estimation were price updated to December t-1.

Price updating is performed at ECOICOP sub-class level.

The main sources of price data is based on manual price collection (in shops and online) and phone surveys (for particular services). Web scraping is used for rentals for housing and 9-11 year old used cars.

Information on average pension is received from State Social Insurance Agency each month (by e-mail). Every month National Health Service provides data on reimbursed medicines (electronic transmission). 

Information of notary fees is based on publications of regulations of Minister Cabinet of Latvia.

Currently an increase in the coverage of large administrative data is not planned.

Transaction data currently are not used for price collection.

Transaction data currently are not used for price collection.

Web scraped data currently are used for data collection for 9-11 year old used cars and rentals for housing. Web scraping for these items was implemented in 2020.

Prices are collected from internet advertisement site. Bulk web scraping is used, but items to which it is performed are selected by previously set filters (for example, web scraping is not performed to all 9-11 year old cars, but for selected car brands).

Currently there are no plans to increase the coverage of web scraping, but possibilities to increase the use of web scraping are reviewed each year.

Currently foreign websites are not being scraped.

The consumer price survey is conducted in Riga and 10 other towns. Using population weights survey data are generalized on all country: on both urban and rural territories. Regional indices are not published.

In 2024, the HICP 'basket' contains 536 goods and services the prices of which are recorded regularly. Approximately 2 thousand various trade and services outlets are surveyed. In total, about 24,5 thousand prices are observed each month.

Specifications for goods and services under observation are kept unchanged during the whole year.

The outlets, from which prices are collected, are chosen to represent the existing trade and services network, and usually they are based on the three main criteria: popularity among consumers, significant turnover from consumer sales and availability of goods and services included in the HICP basket. The sample of price recording places is regularly updated. If a shop is closed down or liquidated, it is replaced by another shop of an equal significance. The sample also includes open markets.

Different types of localities are included such as cities, small towns by purposive sampling to cover all the most important regions of the country.

Towns and cities in the sample are chosen to cover whole territory of Latvia. There are both big cities and smaller towns depending on the territory with an aim to represent price dynamics for the major part of the population in a certain area. Not all the big cities of Latvia are included, sample is formed to be balanced and representative and also to ensure cost efficiency.

Using population weights survey data are generalised on whole country. No regional HICPs are calculated.

All types of outlets, from which prices are collected, are chosen to represent the existing trade and services network, and usually they are based on the three main criteria: popularity among consumers, significant turnover from consumer sales and availability of goods and services included in the HICP basket. Outlets are selected in cooperation with price collectors.

Market stalls, internet shops and petrol stations for other products than petrol are also included in HICP.

The sample of price recording places is regularly updated.

When an outlet is closed down and it is confirmed that it will not reopen, the price collectors substitute the outlet with another, the most similar one where customers of the previous closed outlet will likely go shopping.

The sample of price recording places is regularly updated. Staff of CPI unit and price collectors follow the representativity of stores where price recording is done, and if necessary, replace by more popular ones or add new so that the price dynamics are captured correctly and are representative for the item and for region. The sample also includes open markets.

There have been no changes in outlet categories in the last year.

Items are chosen by price collectors or CPI unit staff. To ensure coverage of representative goods or services, the list contains item descriptions (loose specification) to provide a framework within which price collectors choose the most frequently sold product in each selected outlet and brief guidelines to help price collectors make an appropriate choice.

Price collectors each month follow the same specified product. In case it is not sold in the particular month, then appropriate imputations are made. If the product is not sold in outlet for 2 months, then it is substituted by another product within the predefined specification and depending on the assortment of the particular outlet.

Price data is collected every month.

The prices of all goods and services, except for the prices of fuels for transport, are recorded every month from 4th to 20th date. Fuels for transport prices are recorded from 1st to 25th date. Qualitative goods with price discounts offered to all consumers are also taken into account in price collection. The prices of goods are used to calculate the HICP of the month in which they were observed, whereas the prices of services are used to calculate the HICP of the month in which the consumption of the service at the price recorded can commence.

In 2024, the HICP 'basket' contains 536 goods and services the prices of which are recorded regularly. Approximately 2 thousand various trade and services outlets are surveyed. In total, about 24,5 thousand prices are observed each month.

Price collection is performed by trained CSB employees – price collectors. Tablets are used for price collection.

The prices of all goods and services, except for the prices of fuels for transport, are recorded every month from 4th to 20th calendar day. Fuels for transport prices are recorded from 1st to 25th calendar day.

Tablets are used for price collection since year 2020. Price collector can access price history, product description and any other information necessary to perform the price collection. Prices that are collected automatically are transmitted to the central office database.

First steps of data validation are carried out at the time of data collection. A number of logical and arithmetical validation rules allow to avoid data entry errors.

For the detection of outliers spatial and historical dimensions of the prices and price movements are examined during the validation process in order to detect any unusual price development, which then is subject of further investigation. CPI unit staff reviews both individual and aggregated indices to check whether the price movements are in line with market information.

First steps of data validation are carried out at the time of price collection. A number of logical and arithmetical validation rules allow to avoid data entry errors.  

In case of significant price change (20%) additional notification appears for price collectors and such changes if not an entry error should be confirmed with a comment.

Price colletors are asked for further explanations when needed, in order to confirm, adjust, or reject the relevant observations.

The data processing system identifies those sub-indices with a significant contribution to the total index, which allows these to be checked for possible errors. It also quickly identifies large individual price changes, which are similarly checked.

For web scraped data standard data validation procedures are used - automatic validations based on preset filters and removing of duplicates with additional manual validation procedures (comparing number of records and items, removing outliers).

The weights at all levels are annually updated according to NA, HBS and additional sources as administrative data, branch statistics data, as well as information provided by enterprises and retailers. 

Weights are compared with the previous year and significant changes are checked with colleagues from NA (since HBS is not updated annually, then additional checks for HBS data are only performed in case of new HBS survey).

Price-updating is also verified by ensuring that weight increases or decreases are compatible with the respective price changes.

The reliability of the indices is ensured by both automatic and manual data validation by CPI unit staff. Analysing the submitted data and their compliance with the methodological requirements.

Additional information on global market trends, analytical publications and forecasts of the National Bank, the Ministry of Finance and the Ministry of Economics are being reviewed.

HICP is Laspeyres-type index.

Arithmetic mean of the prices is used for elementary aggregates.

Number of decimals that are used for HICP:

• Price observations - 2
• Weights - 12
• Compilation and transmission of index and rates of changes - 12
• Publication of index - 2
• Rates of change - 1

Rounding is used for compilation of index. Truncation is not used.

HICP is Laspeyres-type index.

Arithmetic mean of the prices is used for elementary aggregates.

Number of decimals that are used for HICP:

• Price observations - 2
• Weights - 12
• Compilation and transmission of index and rates of changes - 12
• Publication of index - 2
• Rates of change - 1

Rounding is used for compilation of index. Truncation is not used.

Price indices of lower aggregation levels are calculated as the ratio of arithmetic mean prices in the comparison and the reference periods.

For the calculation of higher level price indices and the overall HICP a Laspeyres-type formula that expresses the weighted arithmetic mean value of the lower-level price indices is used:

 
Since web scraping is used in a way to imitate manual price collection results, then no specific procedures are performed for aggregation in these cases.

The reference period used in the HICP calculations is the average value of 2015 (2015 = 100). If December of each year is the linking month, then price index in month m in year G is calculated as follows:

I 0 m , G = I 0 D e c , 0 ∗ ( ∏ g = 1 G − 1 I D e c . g − 1 D e c . g ) ∗ I D e c , G − 1 m , G ">

Quality Adjustments

Price collectors perform the initial steps for quality adjustment, by selecting the most suitable replacement, estimating the comparability of both products and reporting on the differences in characteristics between them. The instructions and examples are described in the manual for price collectors. Staff of the CPI unit makes the final quality adjustment.

For fruit, vegetables, clothing, footwear, audio recordings, books in rapidly-changing market direct comparison is the primary (most often used) quality adjustment method. For other product categories, mostly the bridged overlap in case of major changes and direct comparison in case of minor changes is used.

Quality adjustment according to fuel efficiency of a car is used for new motor cars.

Two types of second-hand motor cars are included - 3-5 year old and 9-11 year old.

For quality adjustments of 3-5 year old cars supported expert judgement based on age and mileage coefficients in case of minor changes is used. In case of major changes, the bridged overlap is used.

For quality adjustments of 9-11 year old cars direct comparison with weighted average is used.

There are no automatic quality adjustment procedures for any product group. Instead, the choice of method depends on the specific replacement situation and selected replacement product-offer.

Replacements

Product replacements are mainly done by price collectors or in some cases by CPI unit staff. Replacements are made if there is information that product will not be available on the market or during the annual sample update.

Price collectors follow predefined item specification when selecting a replacement. The new item is selected based on the assortment of store and representativity of the item in general. Each year the item specifications are reviewed and updated if necessary to reflect the current situation in the market.

Seasonal products are treated according to the requirements of the Implementing Regulation (EU) 2020/1148.

The following ECOICOP/HICP classes contain seasonal products: 0116, 0312, 0313, 0321, 0551, 0721.

Strict annual weights are used for determining the weights for seasonal items, i.e., the indices of seasonal items are calculated with fixed weights during the whole year. Therefore, estimated prices are applied for seasonal items that are out-of-season.To estimate the prices of out-of-season products within ECOICOP/HICP classes 0312, 0321 and 0721 the counter-seasonal estimation method is applied while for the rest of seasonal products - the all-seasonal estimation method.

Sales periods in Latvia are not defined by any legislation and depend upon shops.

See next point.

The HICP is not seasonally adjusted.

Information about HICP and HICP-CT metadata can be found in Official statistics portal of Latvia.