Hungarian Central Statistical Office (HCSO)

National Accounts Department - Consumer Prices Section

Keleti Károly Str. 5-7/1024 Budapest/HUNGARY

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

HICP comprises all purchases by households within the territory of a country; those by both resident and non-resident households. There are not any deviations from the target population.

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

The whole economic territory of Hungary is represented in HICP as defined by ESA 2010.

The capital city and all the 19 counties are covered.

3.8.1. Start of time series

The HICP series started in January 1997.

3.8.2. Start of time series - national specifics

5-digit ECOICOP since December 2000. All-items and 2-digit ECOICOPs since January 1996.

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.

The HCSO has an own confidentiality policy which is available on the HCSO’s website.

All statistics collected and published by the HCSO are governed by the confidentiality provisions of the Act CLV of 2016 on Statistics, which specify that the HCSO cannot publish, or otherwise make available to any individual or organization, statistics that would enable the identification of data for any individual person or entity. There are two exceptions:

• Individual data on the activities of institutions, social organizations and state budget institutions performing activities of public interest may be made public without prior written consent of the data supplier if the respective data relates to the activities of public interest;
• Individual data without written consent of the data supplier may be transferred for statistical purposes only, to an international organization engaged in statistical activity, and in order to meet an international commitment, defined by rule of law.

The data are compiled under the terms of the Act CLV of 2016 On Statistics and the Act CXII of 2011 on the Right of Informational Self-Determination and on Freedom of Information.

Official statistical activity is regulated by Act CLV of 2016 on Official Statistics entered into force on 1 January 2017 and by Government Decree 184/2017. (VII. 5.) issued for the implementation of this law.

The English version of the text of Act CXII of 2011 is available on the Hungarian National Authority for Data Protection and Freedom of Information’s website.

The Hungarian National Assembly made the Act CLV of 2016 in order to ensure the HCSO’s independence and professionalism, and further strengthening of the confidence in official statistics.

Legislation - Hungarian Central Statistical Office (ksh.hu).

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.

HCSO's website.

Harmonised consumer price indices are published monthly. Hungarian figures for monthly and annual change are published in the press release of Consumer prices. The data are released simultaneously to all interested parties by issuing the press release (First Release - Consumer Prices) to the media at 8:30 am on the day of release.
The first release is also available on the HCSO website at 8:30 am (local time) on the day of release. The first releases of HCSO are published in user friendly, HTML format. The detailed data are subsequently posted on the HCSO website in the database (under 'DATA'). Available languages are Hungarian and English.

HCSO ensures preliminary access to first releases (on the afternoon before the day on which they are published) which are required by the organisation in the narrowest possible personal circle for the following public decision-making bodies:

• Prime Minister’s Office,
• Ministry of Finance,
• Ministry for Innovation and Technology,
• Central Bank of Hungary.

In order to assist ministers and the leader of the Central Bank of Hungary, HCSO forwards the first releases which are required by the organisation to the mailboxes of the persons given by the organisation on the day prior to publication at 5 p.m. – in line with the closing of the continuous phase of trading in the Budapest Stock Exchange. According to the rules of the embargo, data cannot be disclosed before the official publication. The leaders of the institutions for whom HCSO ensured prior access within an appropriate framework are responsible for respecting the embargo and maintaining the confidentiality of data.

The HCSO disseminates unpublished but non-confidential data on different requests.

The users may contact the Contact Center of the HCSO.

Monthly

HCSO publishes monthly and annual HICP all-item data in the First Release:

http://www.ksh.hu/consumer_prices_tn?lang=en

The first release is available in HTML format.

The HCSO published HICPs for the 12 main divisions are also accessible in Data tables ’STADAT’ on the HCSO’s website:

http://www.ksh.hu/stadat_files/ara/en/ara0003.html

The first release is available online, on the HCSO's website at 9:00 am CEST on the day of release, in HTML format.

HCSO publishes monthly and annual HICP data in the First Release:

http://www.ksh.hu/consumer_prices_tn?lang=en

HICPs are published on the 8th to 11th day of the following month, except in January and February, when they are published later mainly due to the calculation of the annual data and weights.

Annual analysis on CPI/HICP is available only in Hungarian language.

HCSO's website - Data/Publications - Summary tables (STADAT) - Prices - Annual and infra-annual data.

Eurostat's website: HICP database

With reference to the Hungarian HICP the HCSO does not publish any micro-data.

Within other publications: Statistical Yearbook of Hungary, Hungary 2022. I-IV. quarter, Indicators of sustainable development for Hungary, 2022 (only on Hungarian language)

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

'Methodological Notes' are included in each publication on the HCSO website.
'Metainformation' about HICP are available on the HCSO's website.

Given the importance accorded to the accuracy and comparability of the HICPs, Eurostat operates a system of compliance monitoring to ensure that the legal framework is adhered to. This includes compliance assessments on the basis of questionnaires and visits by Eurostat officials to the national statistical institutes to study the work on HICP in more detail. Eurostat must ensure that the statistical practices used to compile HICPs are in compliance with HICP methodological requirements, and good practices in the field of consumer price indices are being followed. Compliance monitoring is crucial in promoting confidence in HICP data and Eurostat needs to be assured that Member States are complying with the Regulations in order to support the need for high quality HICP Statistics. Recommendations are published and followed up by Eurostat. The follow-up process ensures that the recommendations are taken up by the Member States. The latest Compliance Monitoring was published in March 2020.

Eurostat's Compliance monitoring reports for Hungary are available in the web page Quality - Harmonised Indices of Consumer Prices (HICP) - Eurostat (europa.eu) or through the direct links underneath:

• HICP Compliance Monitoring Report of 2020 and
• follow-up HICP Compliance Monitoring report of 2022.

See also information on Compliance Monitoring under points 11.1.1 and 11.2.1.

Quality policy of HCSO and Quality guidelines for the statistical processes of the HCSO are available on the HCSO’s website.

According to its quality policy HCSO is committed to

• get acquainted with the present and future needs of the users of statistical data
• measure the quality of statistical products and production processes regularly, assess the results of measurements, and on the basis of the results, execute the development of products and data production activities continuously
• utilize the latest achievements of the statistical profession during its operation, by applying the best national and international practices of other organizations
• make efforts to reduce the response burden
• develop quality culture in the office and in other organizations of official statistics; in the frame of this, HCSO supports and initiates quality trainings and courses
• properly develop the professional knowledge and skills of the staff in line with requirements, and to improve the conditions of work as much as possible

The arrangements for the fulfilment of the mentioned objectives and for continuous development are published in the medium-term Strategy of HCSO, as well as in annual work programmes. Reports on the monitoring and assessment of tasks are published on HCSO website annually.

HCSO operates in line with the basic principles of the European Statistics Code of Practice and facilitates other national organizations of official statistics to apply them. In the frame of standardized self-assessment, coordinated on European level, HCSO regularly reports on the fulfilment of the code’s principles. The related documents are published on the website of HCSO in Hungarian and English. See 10.7

11.1.1. Quality management - Compliance Monitoring

Compliance Monitoring

11.1.2. Quality assurance - national specifics

Controls on the quality of the work

There is a manual mainly for the central staff about the methodology of Hungarian national CPI/HICP (and any other calculated consumer price indices). It contains the main characteristic of the CPI/HICP work process, from the price collection to the publication of the results.
There is a manual for price collectors (and of course for local staff as well) which contains instructions about selection of product offers in the outlet, the circumstances of replacement, etc. This manual is revised regularly.
In each year we discuss the major evolutions of the preceding year with the CPI coordinators responsible for the organisation of price collections and we give them written instructions for the future.

Controls on the quality of the data

There is a list of codes for the different price changes. (e.g. 1 - sales, 2 -sale is over, 7 - item change (without outlet change), 8 - item and outlet change, 9 - outlet change (without item change), etc.). The price collectors must indicate the appropriate code next to each price. The data entry software automatically checks the logical consistency between the previous month's price, the current price and the code. It is not possible to enter a code indicating a price movement contrary to that evident from the entered prices. The CPI coordinators examine the control list thoroughly. They correct any prices found to be inaccurate.
A number of checks are carried out at central office too. There are several lists which help identify any possible errors in the collected data and ensure the thorough examination of the results.

11.2.1. Compliance monitoring - last report and main results

The last available compliance or follow-up report can be found in the Eurostat’s web page: Quality - Harmonised Indices of Consumer Prices (HICP) - Eurostat (europa.eu).

11.2.2. Quality assessment - national specifics

According to the standard documents of the ESS quality system the HCSO developed its quality policy and the methods and tools of quality assessment.
Quality policy and guidelines for statistical processes of the HCSO are available on the HCSO’s website. See 10.7

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

'Our mission is to assist informed decision making, research and dialogue between all actors of society by producing and disseminating trusted, high-quality official statistics and analyses. Our vision is that HCSO gains respect in and outside Hungary for our committed staff being responsive to changing users’ needs, continuously increasing efficiency, improving quality, reducing burden on respondents and spreading statistical literacy.' — Quality policy of HCSO

•  Inside HCSO

     National Accounts, Dissemination, Rural Development, Agriculture and Environment Statistics, Living Condition, Labour Market and Education Statistics.

     User needs: data production, analysis, income calculation, deflation, dissemination.

•  National organizations: Government, Authorities, National Bank

      User needs: data production, analysis, forecast, dissemination, database.

•  Other national: news agencies, journalists, companies, courts, analysts, lawyers

      User needs: analysis, forecast, dissemination.

• European and international level: Eurostat, European Commission, IMF, ECB, OECD, ILO, UNSD

      User needs: data production, analysis, database.

The Dissemination Department runs user satisfaction survey occasionally.

Until now, there was not any dedicated user satisfaction survey for the field of HICP/CPI.

HICP indices and weights for Hungary are available from December 2000 (all-items and 2-digit COICOPs since January 1996).

HICP-CT is available from December 2005.

Hungarian data for ECOICOP 5 digit level is available from December 2014.

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

The price collection methods ensure sufficient coverage and timeliness. The outlets from which prices are collected are chosen to represent the existing trade and services network and they are based usually on three main criteria:

•     Popularity with consumers;
•     Significant turnover from consumer sales; and
•     Availability of goods and services included.

We do not produce numerical estimates of sampling error because it is difficult to quantify due to the complexity of price index structures and due to the non-probability sampling. We try to reduce the sampling error by using a sample of consumer prices that is as large as possible with the given resource constraints.

The HICP non-sampling errors are not quantified. We try to reduce non-sampling errors through continuous methodological improvements and survey process improvements such as computer assisted price collection or validation process, which can help avoiding typing and other non-sampling errors.

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).

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 HICP. These changes may have introduced breaks in time series. However back calculations under the newer standards were performed when appropriate basic data was available.

Differences between the HICP and national CPI

The Hungarian HICP and the national CPI are almost the same, taking the view that the two indices should be as similar as possible for the sake of efficiency. The only differences are that:

• in the CPI we use the ’national’ concept, while the HICP uses the ’domestic’ concept, so the expenditure by foreign visitors is included in the HICP, whereas in CPI it is not,
• the HICP does not include the cost of imputed rents – which was also excluded from the CPI since 2012 – and gambling/games of chance. Gambling is observed in the CPI,
• in case of the HICP according to the Commission Regulation (EC) No 2601/2000 on the timing of entering purchaser prices into the HICP prices for services are entered into the index for the month in which the consumption of the service at the observed prices can commence. In case of the national CPI we take the prices into account when it appears in consumers’ invoice which normally happens with one or two month delay depending on services.

Methodological notes are available on the HCSO’s website.

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

According to the Commission Regulation No 1921/2001, as revised and repealed by Commission Implementing Regulation (EU) 2020/1148, Hungary is fully in line with the recommendation of the regulation since 2004.

HICP series, including back data, are revisable under the terms set in Commission Regulation No 1921/2001. The published HICP data may be revised for mistakes, new or improved information, and changes in the system of harmonised rules.

The data are final when first released.

We make efforts to discover the mistakes in the data during the checking procedure to avoid the necessity of revision.

If after the data transmission we discover any mistake we correct the mistake, sent the revised data by the normal transmission route without fail indicating the reason of the revision.

Revisions

April 2007

In case of COICOP headings 08.2 and 08.x we had to revise the January, February, March data for HICP.  

The reason of the revision: Eurostat detected an error in the transmitted data file in April 2007.

The mistake was in groups Telephone equipment and services. The group 08.2 was separated only in 2006 from the group 08.x and during the computation procedure it was treated differently as the other groups.

The revision had impact on COICOP headings 08.2 and 08.x index figures.

April 2013

In case of COICOP headings 04.4.1 and 04.4.3 we had to revise the February data for HICP and HICP-CT as well.  

The reason of the revision: we detected an error in the database for these two categories when we produced the HICP data for March 2013, therefore we made a re-computation backwards as well.

The mistake occurred in water and sewerage fees. In our new data processing program the time of recording the new prices of these services was handled incorrectly.

The revision had a minor impact on the All-items index figures and on COICOP headings 04 and 04.4 index figures.

18.1.1. Weights

The source of weights at 4-digit ECOICOP level is Annual National Accounts data. The reference period is year t-2. From 2021, however, Quarterly National Accounts data with reference periods Q1 to Q3 in year t-1 is also used to derive the weights following the guidelines of Eurostat  during the COVID-19 pandemic.

Below the 4-digit ECOICOP level, additional data sources such as Household Budget and Living Conditions Survey (HBLS), Tourism statistics and Car Registry data are also used.

When necessary, the weights are price updated to become representative for weight reference period, i.e. year t-1 December.

Weights are updated annually and they are the same every month throughout the year.

18.1.1.1. Compilation at elementary aggregate level

The lowest level, where we apply explicit weights is elementary aggregate level. The weights on 5-digit ECOICOP level and elementary aggregate level derive from various sources. We collect information from all available sources, like HBLS, retail trade data, information from market research companies and other fields of statistical data collection.

Regional weights are not used, the country-wide collected prices are averaged unweighted. Implicit weightings are made by the different number of collected prices within given counties and the capital city. We do not apply any weights regarding outlets neither, however our sampling techniques ensures representativity through implicit weighting. We do not use weights which are associated with single price observation for product-offer. 

We use the most up-to-date data for the compilation of weights, data from t-1 if they are available, and otherwise data from t-2. Weights are adjusted annually if we have information or any data about relevant changes in the consumption pattern are occurred.

18.1.1.2. Compilation of sub-index weights

For 4-digit COICOP level and above, the compilation of weights are based on Annual National Accounts data for the year t-2 and it was consequently adjusted by the rates of change of available subclass data and estimates for private consumption expenditures in t-1. The adjustment is based on the Quarterly National Accounts data. The estimation of household consumption value for Q4 in year t-1 was estimated based on the 2021 Q4 value updated with the average annual growth rate of 2022 Q1-Q3 for each 4-digit COICOP class.

On the 5-digit subclass level and below, additional data sources (e.g. Household Budget and Living Conditions Survey, Retail Statistics, Car Registry Statistics, Medicine Retail and Subsidies Statistics from the National Institute of Pharmacy and Nutrition, etc.) of t-2 or t-1 year are also used and price update is applied, if it is necessary (i.e. the data source is based on t-2. year).

18.1.1.3. Compilation of sub-index weights

The reference period of Annual National Accounts data is year t-2 and of Quarterly National Account the first three quarters of year t-1. These data sources are used at ECOICOP 4-digit level. At ECOICOP 5-digit and elementary aggregate level the reference period of the used data is year t-2 or t-1 depending on the available data sources.

18.1.1.4. Weights – plausibility checking

The HICP weights are calculated in accordance with Commission Regulation No. 1114/2010 (repealed and replaced by Commission Implementing Regulation (EU) 1148/2020). After the price updating of the ECOICOP subclasses, the new weights are validated based on the previous year’s weights in order to detect unplausible changes. National accounts data are compared to the previous year and if there has been a significant change we consult with the colleagues from National Accounts. In case of ECOICOP 5 digit and elementary aggregates where HBLS data are also compared to the previous year’s data. In the case of critical items we check the absolute figures and we try to find other data source as well. Generally, it has occurred when the price of this specific item has risen or fallen with more percentage points than the average, or the development of this market segment is different from the normal one.

18.1.1.5. Price updating

Price update between year t-2 and year t-1 was not necessary on the 4-digit COICOP class level and above, because the estimations mentioned in 18.1.1.3 were based on data in current prices, so they already contain every price change between year t-2 and year t-1. Below that level, price update based on the 2022 HICP data were applied.

Price updates between year t-1 and December t-1 were done by multiplying by an update factor, calculated as the ratio of the December 2022 price index and the average price index between January and December 2022.

18.1.1.6. Compilation of total household final monetary consumption expenditure

The household final monetary consumption expenditure (HFMCE) is calculated based on the Annual National Accounts data of year t-2 and extrapolated using the average annual growth rates in the first three quarter of year t-1 based on the Quarterly National Accounts data. HMFCE is calculated from the Individual consumption expenditure by households minus narcotics, imputed rentals for housing, games of chance, prostitution, life insurance, health insurance, FISIM, net purchases abroad and pensions. These items were adjusted with factors from the quarterly national accounts statistic of import/exports statistics, micro census, games of chance turnovers, growth rate of insurance premiums, FISIM growth rate and the balance of payments.

For income in kind and administrative charges of private pension funds, we do not have relevant information in the Quarterly National Accounts or any other data sources with t-1 as reference year. Therefore, for these categories, the non-extrapolated data of year t-2 is used to derive the HFMCE.

18.1.2. Prices

The price data is based on a survey.

18.1.2.1. Data Source - overview  

Prices are either collected from outlets by price collector or from the Internet. Data from the Internet is collected manually or by targeted web scraping for some product groups.

18.1.2.2. Scanner data - general information

HCSO does not get scanner data so far.

18.1.2.3. Web scraping - general information

Web scraping techniques are applied for second-hand cars. For other products and services, web scraping is under development and testing. The web scraping as a data collection method is part of the National Statistical Survey Programme (OSAP), therefore the webpage owners are obliged to provide data in this way and must not block the automated data collection.

18.1.3. Sampling

18.1.3.1. Sampling design: locations for survey

According to the Commission Regulation No 1688/98 on geographic and population coverage (repealed and replaced by Commission Implementing Regulation (EU) 1148/2020), Hungary is fully in line with the recommendation of the regulation from the beginning. The whole territory of Hungary is represented. All the 7 regions within that 19 counties and the capital city are covered.

18.1.3.2. Sampling design: outlets

The purposive outlet sampling is based on the retail trade unit register with supplementary information from price collectors and CPI coordinators from the local offices. The outlet sample covers hyper- and supermarkets, discounts, department stores, specialised shops, market stalls, petrol stations. Mail order is not included in the outlet sample since its market share is not significant.

18.1.3.3. Sampling design: newly significant goods and services

During the annual review of representative items it is possible to take into account of newly significant goods and services in the index calculation. We monitor the market, receive useful information from the price collectors and from ECP surveys. The local offices have to send their comments, which include proposals for new items as well, based on the fieldwork of price collectors. In cooperation with the local staff we define the parameters of the new items according to sellers and providers’ information taking into account market information and the recommendation of Eurostat. In order to measure the significance level for a potentially new product we search for the market share of the product based on turnover data. 

Newly significant goods, introduced into HICP in 2022:

• e-cigarette accessories
• foods with home delivery
• car air conditioner charging
• new car models (replacing the old ones)

Price data is collected every month.

18.3.1. Price collection surveys

There are approximately 1,000 items, about 80,000 recorded prices per month in 11,000 outlets.

The central office carries out the selection of items. This is a purposive concentrated selection. A prescribed number of prices for every representative item have to be collected in every county. This number depends on the number of inhabitants in the county. 

There is close and monthly active cooperation and communication between the central and the local offices. The connection between the central office and the price collectors is provided by the coordinators. 

There is a manual for price collectors (and of course for coordinators as well) which contains instructions about selection of product offers in the outlet, the conditions of replacement, etc. 

Besides particular data collections (as price collection or HBLS) there are general technical manuals which contain useful information on behaviour of collectors and give some special guidelines to them. The technical manual is updated occasionally, but in every year the statisticians of the Consumer Prices Section give written instructions to the CPI coordinators about the changes entering into force from the next year.

HICP is computed on the basis of the national CPI; thus there is no need for special education for the whole staff. The staff of the central office monitors the HICP compilation. We have participated the meetings and seminars, which are organised by Eurostat regularly. With the help of the translated regulations (official version) all members of our section are able to become acquainted with and apply the Eurostat recommendations.

Central price collection

In case of specific items prices are collected centrally.

Tobacco: prices are the same in the whole country. In case of tobacco 9 different items are observed, including cigarettes and fine-cut tobacco. The retail price of the products must be reported to the National Tax and Customs Administration, which publishes them on its website. Price data for the HICP is collected from there. 

Reimbursed medicines: the final prices, which have to pay by the customers, are collected from the website of National Health Insurance Fund (NEAK). These prices are the same in the whole country. 

For electricity and natural gas prices are collected centrally in every month as there are four suppliers in the whole country with officially controlled prices. 

For transport by railway and road as well as postal services, toll facilities and administrative fees, prices are the same in the whole country with a basis of officially defined prices by laws or regulations. 

Postal services: prices are the same in the whole country. Source of the data is the Hungarian Post Office Ltd. 

In case of telecommunication, prices are collected centrally by the staff of Consumer Price Section as prices for particular services normally do not vary among cities. 

In case of television, licence fees prices are collected centrally in every month at the largest providers on the basis of their market shares. The observed coverage is approximately 90%. 

Toll facilities: prices are the same in the whole country. Prices are regulated centrally by the Decree No 45/2020 (XI. 28.) of the Ministry for Innovation and Technology on the tolls payable for the use of motorways, highways and main roads. At the moment there are two different type of fee are observed, the weekly fee and the annual regional fee for motorcycles and passenger cars. These have the largest part of the revenue from tolls. 

Newspapers: prices are the same in the whole country. Source of the data are the sellers of the observed newspapers. In case of newspapers 11 different items are observed, including daily and weekly newspapers as well as magazines and subscription to newspapers. TV program guides are observed as well. 

Best-selling books: prices are collected from the websites of the largest book shops using their top-lists. 

In the case of education fees and school books, the data collection is less frequent than on a monthly basis because these prices stay unchanged during one semester. Therefore, prices are collected in every September and they are used until the next year. In case of education we follow the prices in pre-primary, primary, secondary, post-secondary and tertiary education, furthermore prices of some language courses which belong to the education not definable by level. 

In case of insurance, we collect prices via internet and insurance companies (number of observed insurance companies are 12 in 2023), which have significant market share. 

In case of financial services, the charges for banking services are included. The larger financial institutions (which have significant market share) are involved into the data collection. For these services, prices are collected in the largest 7 banks, credit and financial institutions.

The price of second-hand cars, as well as, desktop computers are also collected centrally.

For fuels and lubricants for personal transport equipment, a greater extent was monitored that the price collection are divided uniformly. Besides the traditional price collection price data of the Hungarian Oil & Gas Company (market leader) is followed during the whole month as control information for validation.

Selections of representative items and the outlets

Selections of representative items (goods and services) as well as the outlets are based on information from various sources (retail trade, local offices etc.) The purposive selection is concentrated on the volume selling items and outlets proportionate to size. In case of seasonal products 'markets' are also selected for price observation. In certain cases, price collectors have some freedom to select different varieties in different outlets, but they have to leave them unchanged within a given outlet until the selected commodity satisfies the criteria of representatives and expected continuous availability. 

If the observation fails due to non-availability of an item or for any other reason, estimated prices are used for the first or second month. Replacement is used from the third month.

18.3.2. Timing of price collection

The observation time extends during the first 14 working days of each month.

Data is validated for plausibility and internal consistency both at the individual price quoters' and at the index level. The tasks are divided between the CPI coordinators at the local offices and the employees at the Consumer Prices Section.

18.4.1. Data validation - price data

Processing and validation procedures are the following in local offices:

When the price collector records the data (both prices and codes) on the PDA, the data entry software automatically checks the logical consistency between the previous month price, the current price and the code. It is not possible to enter a code which indicates a contrary movement in prices than comes from the price quotation.

The person in charge of prices for each local office examines several control list thoroughly. They correct the prices found to be inaccurate, indicate this correction on the list and authorize the transmission of the price data. The control list must be kept for two years.

Processing program operates at central office too with several control functions. HCSO has several lists where automatic-checking procedures are implemented using a computer program. One list contains data for each item per counties: e.g.: the number of recorded prices in the current month, the previous month and the base month, the average price in HUF, the average price change in percentage of the previous month, the value of relative standard deviation, etc.

Another list contains a certain number of the lowest and highest recorded prices. The function of this list is to provide support for the maintenance of representative item data and for quality control with respect to the activity of those who compile prices in each case.

Quality and consistency checks are also carried out by Eurostat.

18.5.1. Elementary price index formulae

HCSO calculate a chain Laspeyres-type index on ECOICOP classification since the beginning of HICP work.

Fixed weights are used to aggregate basic headings indices to higher levels. Over periods of more than one year, it is an annually chained Laspeyres-type index.

Only the two formulae are used specified in the Commission Regulation No 1749/1996 on initial implementing measures, repealed and replaced by Commission Implementing Regulation (EU) 1148/2020.

Elementary price indices of the representative items are calculated on the basis of average price of current month and reference month.

Alternative formula is not used in HCSO.

Number of decimals that we apply for price observation: 0, weights: 2 (per mille), compilation of index figures: it is unrounded, transmission of index figures: 4, publication of index figures and rates of change: 1, and compilation of rates of change: 1 as well.

In all cases we use rounding.

In the tables of HICP and HICP-CT the precision is 4 and 8 decimals, respectively. The results are built by rounding since January 2016.

18.5.2. Aggregation of different data sources

The individual price observations are aggregated into elementary aggregates first. Simple (unweighted) arithmetical mean is used for the computation of the elementary aggregate average prices. However, in some cases (e.g. airfares, package holidays) the geometric mean is used if we have items with different types of measurement units. From the average prices of elementary aggregates, price indices are calculated (see section Index formulae) which are aggregated further into detailed consumption groups as a weighted arithmetical mean of the elementary price indices of adherent items (Laspeyres-formulae).

18.5.3. Chaining, linking and splicing methods

HCSO calculate a chain Laspeyres-type index on ECOICOP classification since the beginning of HICP work.

Fixed weights are used to aggregate base headings indices to higher levels. Over periods of more than one year, it is an annually chained Laspeyres-type index. Linking calculations are made by indices whose basic period is previous December = 100.

18.5.4. Quality adjustment – Detailed information

For quality adjustment direct comparison and bridged overlap are used in most cases, however some product groups are treated differently. 

Cars

In case of new and second-hand motor cars mainly explicit quality adjustment methods are applied (option pricing – taken as 50-50 method, where the option factor is 0.5, the half of the price difference is considered as quality difference when any new extra appliances are put in cars). Implicit methods are also applied for new motor cars when a brand new model (the replacement product) appears on the market and the old one (the replaced product) disappears. In this case overlap/bridged overlap methods are applied.

Garments

In case of clothing we apply discount corrected bridged overlap when the replacement product differs significantly from the replaced product.  Otherwise we use direct comparison. For this product group, we avoid the automatic application of bridged overlap method, in order to avoid any downward bias stemming from huge discounts on the items prior exit from the market.

Other products and services

In the case of foods, alcoholic beverages, non-durable household goods, article and products for personal care and some kind of services we also apply package size adjustment beside direct comparison and bridged overlap. For some products and services (such as electricity, motor fuels, fruits and vegetables) we do not use any quality adjustment at all.

The quality adjustment methods are applied in the final step of index calculation in the central office.

We are completely fulfilling case specific HICP standards of the Eurostat for clothing and footwear (HICP manual, p 318-323), for books, CDs and computer games (HICP document 2004/509) and for cars and other vehicles (HICP manual, page 260-275 and HICP document 2005/520).

18.5.5. Seasonal items

Within the following product groups there are one more elementary aggregates, which are seasonal and not observed for the whole year:

01.1.6. Fruit

01.1.7 Vegetables

03.1.2 Garments

03.1.3 Other articles of clothing and clothing accessories

03.2.1 Footwear

04.5.4 Solid fuels

05.1.1.2 Garden furniture

05.3.1.4 Heaters, air conditioners

09.3.2.1 Equipment for sport

09.4.1 Recreational and sporting services

09.4.2.1 Cinemas, theatres, concerts

09.6.0.2 Package international holidays

10.1.0.2 Primary education

10.4.0.0 Tertiary education

10.5.0.0 Education not definable by level

11.1.1 Restaurants, cafés and the like

11.1.2 Canteens

11.2.0 Accommodation services

As regards seasonality, fish is not relevant in Hungary, because the items within the group are available all year around, and in addition their weights in the household consumption are low.

Not applicable.