National Statistics Office (NSO)

Economic Statistics Directorate (Unit A5) - Price Statistics

National Statistics Office (NSO), Unit A5: Price Statistics, Lascaris, Valletta, VLT2000, Malta

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

There are no differences as regards the territorial and population coverage.  The domestic concept is not applied in our national CPI.

Social protection and accommodation services are excluded from the national CPI. The national CPI covers the expenditure of the typical 'Maltese' (residents as well) consumer. Otherwise there are no differences in coverage. The weight is the most important distinguishing factor between the national CPI and the HICP.

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

Not applicable as all parts of the country are included in the index compilation.

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

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.

At national level: Confidentiality is one of the major principles guiding the activities of the NSO.

Article 40 of the MSA Act stipulates the restrictions on the use of information and in Article 41, the prohibition of disclosure of information. Furthermore, Section IX of the Act (Offences and Penalties) lays down the measures to be taken in case of unlawful exercise of any officer of statistics regarding confidentiality of data. No cases of breaches in the law have ever been recorded - LEĠIŻLAZZJONI MALTA (legislation.mt)

Since its inception, the NSO has always operated within a culture of strict confidentiality to which it is also bound by the provisions of the Data Protection Act. This Act, which came fully into effect on July 15, 2003, seeks to protect individuals against the violation of their privacy by the processing of personal data.

Reference is also made to Eurostat's guidelines: Statistical confidentiality and personal data protection - Microdata - Eurostat (europa.eu).

During 2009, the NSO has set up a Statistical Disclosure Committee to ensure that statistical confidentiality is observed, especially when requests for microdata are received by the NSO.

Upon employment, staff is informed of the rules and duties pertaining to confidential information and its treatment. According to the MSA Act, before commencing work, every employee is required to take an oath of secrecy whose text is included in the Act.

At European level: Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

As a result, the following list of items are considered confidential, mainly for the data protection of the outlets:

• Individual item prices and descriptions 
• Calculation sheets

According to policy rules (see point 7.1).

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.

The news release calendar is available on the website NSO Malta | Calendars (gov.mt).

The updated dissemination policies will soon be uploaded on the NSO website as revisions of certain policies are underway. 

The news release calendar is available on the NSO website and includes a 6-month advance notice.

Pre-access to the data is only granted to Ministry of Finance and the Malta Statistics Authority (MSA).

At the same time of the news release dissemination, detailed price indices of the national CPI are released on the database NSO Malta | Prices (gov.mt).

Monthly

HICP figures are disseminated in English on a monthly basis. We confirm that there is electronic dissemination through the website (releases are uploaded at 11am).

The HICP news release sheds light over its 12 main ECOICOP groups, and it is issued on a monthly basis. Everyone has access to the same information simultaneously. All news releases are regulated by an internal dissemination policy.

The HICP news releases can be accessed through the website NSO Malta | Prices (gov.mt).

Not applicable.

HICP data is not available on NSO's online Statistical Database (gov.mt).

HICP data can be accessed on Eurostat's online Database - Harmonised Indices of Consumer Prices (HICP) (europa.eu).

Microdata is not disseminated at a national level.

Formal requests are received through NSO's web e-form page: Request for Statistical Information (gov.mt). 

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

The document ‘The RPI and the HICP Manual’ explaining in detail the methodologies used for the monthly working of the RPI and the HICP is available on our website. The document, which is primarily intended for use by economic and social analysts and other researchers, can be accessed from the link underneath:

RPI Sources & methods.pdf (gov.mt)

The HICP Metadata is also accessible from the link underneath:

Harmonised index of consumer prices (HICP) (prc_hicp) (europa.eu)

The Eurostat's Compliance Monitoring Report of 2018 gives Eurostat's review of the HICP for Malta in the context of quality assurance. The report together with its follow-up report can be accessed through the web page: Quality - Harmonised Indices of Consumer Prices (HICP) - Eurostat (europa.eu) or through the direct links:

• Report - HICP compliance monitoring - Malta (published 2019)
• Follow-up report - HICP compliance monitoring - Malta (published 2022)

Not applicable.

11.1.1. Quality management - Compliance Monitoring

Compliance Monitoring

11.1.2. Quality assurance - national specifics

Specialised personnel check all prices every month. Any abnormal price movement is identified and discussed with the price collector reporting that price change. If a plausible explanation for that price change is provided, the price is accepted. Otherwise, the price collector is asked to check the price again. One of the reports available to identify grey areas is a sheet pinpointing those items which have a relatively high annual or monthly rate. Moreover, another report that highlights the major changes taking place at the 4-digit ECOICOP is available. This facilitates validation by qualified personnel.

11.2.1. Compliance monitoring - last report and main results

The last available compliance and follow-up reports can be found on Eurostat’s web page: Quality - Harmonised Indices of Consumer Prices (HICP) - Eurostat (europa.eu), or accessed through the direct links underneath:

•  Report - HICP compliance monitoring - Malta (published 2019)
• Follow-up-report -HICP compliance monitoring - Malta (published 2022)

11.2.2. Quality assessment - national specifics

Not applicable.

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

The key users of the HICP are the Central Bank of Malta (CBM) and the Economic Policy Division (EPD) within the Ministry for Finance (MFIN). The CBM normally requests detailed information to produce forecasts, whereas the EPD is more interested in explanations of certain price trends.

Views and opinions of users are normally collected from newspapers or the media.

A user satisfaction survey is not run regularly.

The most recent user satisfaction survey was conducted in 2021.

No user satisfaction index is calculated.

All required statistics are produced in accordance to the respective regulations and guidelines.

The overall accuracy of the HICP is deemed to be high especially in terms of the methodological soundness of price and weight sources and compliance to commission regulations. 

No particular test procedures are in place to test the overall accuracy, however, all changes are analysed and significant price differences are checked thoroughly. Missing prices are detected at the vetting stage. Detected errors after publication are corrected with the issue of an errata corrige.

Data processing flows are documented.

Not available.

Human errors in coding and data entry are the two main types of non-sampling errors. Besides, the weighting scheme is normally based on different assumptions which might give rise to 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 European Parliament and Council Regulation (EU) 2016/792).

HICP data are fully comparable over time. There have been several improvements in methodology 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 are frequently performed when the appropriate basic data is available. For instance, the basket of representative items is slightly modified as deemed necessary on a yearly basis. Whenever new items are introduced, a break in time series might be introduced as data might not be comparable over time for certain ECOICOP codes.

The HICP and RPI are two separate measures of inflation. The main difference between the two indices is that the HICP takes into account all money spent in Malta and Gozo (domestic concept) irrespective of whether the purchaser is a resident or non-resident, whereas the national CPI takes into account all money spent by the Maltese in Malta and Gozo. The main characteristics that illustrate the differences between the two indices are:

HICP

• 12 Divisions
• Newly significant goods and services introduced every year
• Chain-linked index
• Weights add up to 1000
• Accommodation services are included
• Regulated by European Commission
• Monitored by Eurostat

RPI

• 10 Groups
• The list of goods and services is based primarily on the HBS
• Fixed-base index
• Weights add up to 100
• Accommodation services and Retirement home services are not included
• Guidelines specified internally
• Monitored by RPI Monitoring Board

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

It is not possible for the RPI to be revised.

The index is revised whenever necessary. The last revision was held in 2012 due to more accurate data being made available by the local public transport provider. The revision did not bring about a break in series and back data did not require any adjustments.

18.1.1. Weights

The COVID-19 pandemic led to significant changes in the households’ final monetary consumption expenditure. Eurostat’s recommendations were set in the following methodological note:

• Derivation of HICP weights for 2023

The 2021 HICP weights were exceptionally compiled using preliminary data from the quarterly National Accounts (NA) for 2020, complemented with more detailed data notably from the turnover indices for retail trade and services.  By the end of 2020, NA data for household consumption was available for the first 3 quarters of 2020.  Thus, the fourth quarter had to be estimated on national accounts data or other sources. 

For 2022 and 2023, HICP weights were constructed using the same approach as explained above for 2021. 

18.1.1.1. Compilation at elementary aggregate level

The calculation methods for the weights comply with the standards set by the Commission Regulation No 1114/2010 on HICP weights, implemented in 2010 (repealed and replaced by Commission Implementing Regulation (EU) 1148/2020). This implies relying on the expenditure data of the NA unit.

The weighting scheme is primarily based on the National Accounts expenditures of year t-2 (which is price updated to December of the previous year), and the Household Budgetary Survey was conducted in 2015/2016. The exercise sheds light over the consumption patterns of a randomly-selected sample of persons living in private households. The Household Budgetary Survey (HBS) comprises of data at ECOICOP level 5 while National Accounts at ECOICOP level 4. NA provides tourist expenditures, which are integrated in the weighting structure. In the benchmark year i.e. 2015 NA started with the expenditure by residents, added tourist expenditure, personal expenditure of persons in institutional care and some other adjustments, and came up with a higher value than the original HBS figure by COICOP. Once the expenditure in the domestic market is established in the benchmark year, extrapolations are done for each COICOP based on imports, local production of goods (STS index for local sales) and services and various other sources. Information on weights is also corroborated with other sources such as trade data and tourism data.

The lowest index level of aggregation where explicit weights are introduced was the 4-digit COICOP. Each year all weights are updated but those below the 4-digit COICOP maintain the same ratios.  The weights below the 4-digit Coicop are updated with each HBS.

Following Eurostat’s recommendations set in its methodological note ‘Derivation of HICP weights for 2023', the 2021 HICP weights were exceptionally compiled using preliminary data from the quarterly National Accounts (NA) for 2020, complemented with more detailed data notably from the turnover indices for retail trade and services.  By the end of 2020, NA data for household consumption was available for the first 3 quarters of 2020.  Thus, the fourth quarter had to be estimated on national accounts data or other sources.  

NA provided the expenditure data for 2019 and 2020 up to Q3 split by quarter. Quarter 4 2020 was estimated by applying the change in consumption between Q1-3 of 2019 and Q1-3 of 2020 to Q4 of 2019 at the level of total consumption.  Certain item weights are based on estimated figures for Q4 on other sources rather than NA data, such as Short-Term Statistics (STS) data.  STS provided turnover data for 2019 and 2020 split by quarter.  This data was used in the estimations undertaken for restaurants, accommodation and clothing (amongst others).   

The weights of products are determined from the expenditures of both HBS and NA, provided that their share is at least 1/1000. Due to the small size of the island we do not use regional or outlet weights. However, it is not excluded that outlet weights would be required in the near future especially since prices of the same physical outlets, will start being scraped from the internet, will be included in the index compilation.

For 2022 and 2023, HICP weights were constructed using the same approach as explained above for 2021. 

18.1.1.2. Compilation of sub-index weights

All sub-index weights were based on National Accounts (NA) data which takes into account HBS figures and are adjusted for any under or over estimations, accordingly. Further adjustments are made from our end for those figures which deviate drastically from previous years when compared to the weights trends of the previous years.

18.1.1.3. Compilation of sub-index weights

Normally, the weighting scheme is primarily based on the National Accounts expenditures of year t-2 (which is price updated to December of the previous year), and the Household Budgetary Survey conducted in 2015/2016.  However, HICP weights 2021 were based on NA expenditures of year t-1 data, covering Quarter 1 to Quarter 3.  2020 Quarter 4 was estimated, in order to obtain the total expenditure of 2020.  This provided a good basis for a first estimate of the overall level of total household consumption expenditure, which should provide the frame for the HICP weights estimates.

For 2022 and 2023, HICP weights were constructed using the same approach as explained above for 2021. 

18.1.1.4. Weights – plausibility checking

Weights at 4-digit level ECOICOP are based on NA data while weights at 5-digit COICOP and lower levels are based on HBS data.  Shifts in weights from one year to the other is analysed further and queries are bounced with NA and HBS unit. 

18.1.1.5. Price updating

Price-updating to the previous year's average price level is carried out in the case of all the seasonal items.

Price-updating to the previous year's December price level is carried out with the exception of the products listed in the previous point.

Since the weights at the 4-digit COICOP are price updated, they are then passed over to the elementary aggregates level (even though the ratio at the lowest level remains the same).

18.1.1.6. Compilation of total household final monetary consumption expenditure

NA provided the expenditure data for 2019 and 2020 up to Q3 split by quarter. Quarter 4 2020 was estimated by applying the change in consumption between Q1-3 of 2019 and Q1-3 of 2020 to Q4 of 2019 at the level of total consumption.  Certain item weights are based on estimated figures for Q4 on other sources rather than NA data, such as Short-Term Statistics (STS) data.  STS provided turnover data for 2019 and 2020 split by quarter.  This data was used in the estimations undertaken for restaurants, accommodation and clothing (amongst others).   

For 2022 and 2023, HICP weights were constructed using the same approach as explained above for 2021. 

18.1.2. Prices

Prices are collected from multiple data sources which include surveys, administrative data, and various other sources.

18.1.2.1. Data Source - overview  

We consult with the Business Registers unit to determine the sample of outlets and make sure to have a representative sample for Gozo, Valletta (capital city), the south of Malta, the north of Malta and the centre of Malta.

The business register is a primary source to identify where consumers do their shopping.

Retail outlets, self-employed, market stalls (Hawkers) and internet websites are included in the sample. However, we do not cover petrol stations (not very representative for products other than fuel) and mail order.

In market stalls, we price fish, fruit and vegetables (but not just in market stalls). Transactions related to accommodation services, gadgets, package tours and air transport services are assumed to be carried out over the internet. The market share of these and other outlet types are not known.

We keep abreast with the developments taking place in the market by holding regular meetings with major stakeholders and following what the main economic pundits of the country are claiming.

Every time a household budgetary survey is conducted or when a shop ceases operations.

Prices for school transport, dental services, general practitioners, consultants and veterinary services are collected via paper questionnaires and/or telephone interviews.

18.1.2.2. Scanner data - general information

We have been trying to collect scanner data and we recently managed to obtain data from three sources (supermarkets).  We are still trying to reach an agreement with the stakeholders by means of a memorandum of understanding, and hopefully address any issues so as to start obtaining more information in a consistent manner.  

18.1.2.3. Web scraping - general information

Web-scraping is not currently being used, however for several items which are currently being collected manually from the internet, manual price collection will shift to web-scraping in the near future. Most likely, we would be able to collect even more prices than we are doing at present.

18.1.3. Sampling

18.1.3.1. Sampling design: locations for survey

Not applicable.

18.1.3.2. Sampling design: outlets

18.1.3.3. Sampling design: newly significant goods and services

Price data is collected every month.

18.3.1. Price collection surveys

Data which is collected from surveys is obtained on quarterly basis, either by means of phone calls or by email. 

18.3.2. Timing of price collection

Survey data is usually collected on a quarterly basis.

Data have to pass two consistency tests before publishing. Any drastic changes in the index observed from month to month are investigated. Unless an error is detected, an explanation is provided. Moreover, the series of some seasonal items are expected to follow more or less the same pattern over time. When this is not the case, these are investigated accordingly.

18.4.1. Data validation - price data

All data entry inputting sources (such as booklets) are vetted before data entry is initiated and any particular changes are queried to make sure that they are correct.  After entering prices, all the products' annual and monthly rates are checked individually. All price changes are analysed and those which are significant are flagged for further checking. Detected errors after publication are corrected with the issue of an errata corrige.

In general, whenever items go out of stock price collectors are instructed to collect prices of similar items, possibly with the very similar specifications. In order to compare like with like, quality and quantity adjustments are carried out wherever necessary. In addition, in cases of drastic changes or change of outlets, the Bridged Overlap method is used to avoid any large disruptions to the time series.

18.5.1. Elementary price index formulae

Our HICP is a Laspeyres-type index covering the ECOICOP/HICP. 

The ratio of arithmetic mean is used.  Traditionally this has always been the easiest method to explain to the general public.

The formula used is compliant with European Parliament and Council Regulation (EU) No 2016/792 on initial implementing measures. 

Number of decimals used in price collection, weights, and the compilation, transmission and publication of indices as listed below:

• Price observations have two decimal places.
• Weights have at least 10 decimal places
• The compilation and transmission of index figures and rates of change have at least 10 decimal places
• The publication of index figures and rates of change have one decimal place

18.5.2. Aggregation of different data sources

As all items at the lowest levels are weighted, in order to aggregate to higher level indices, the sum-products of the indices and the weights are calculated for each COICOP.

18.5.3. Chaining, linking and splicing methods

Indices at 5-digit ECOICOP are chain-linked to those of the previous December.

18.5.4. Quality adjustment – Detailed information

When a replacement model differs significantly from the replaced model, an implicit method or explicit method of quality adjustment is used.  We use three different quality adjustment methods, namely the direct comparison method (comparing prices of the old and the new product over two periods without adjustment), the bridged overlap method (derives the price change between the old and new item from the observed price change of other items in the sub-index) and the hedonic method (regression analysis is used to assess the extent to which the observed variability in the price of a product can be explained by variability in the product's attributes).  

All changes are assessed on a case-by-case basis. The direct comparison method is used only when the change between the replacement and replaced models is not radical.

For Clothing and Footwear, the direct comparison method (B method) is used for all replacements which are deemed essentially equivalent. In the rare cases where a replacement model differs significantly from the replaced model, the bridged overlap method used.  The direct comparison method of quality adjustment, which is considered a B method, is used in all cases. The hedonic method (B method) of quality adjustment is used in compilation of both new and used cars indices. For the latter we use the hedonic re-pricing method described in great detail in the handbook drafted by CENEX HICP Quality Adjustment (16th draft). In the case of new cars the coefficients of the regression are used for quality adjustment.

Products which are characterised by continuous technological advancements are regularly quality adjusted.

Where quality changes occur, in most cases we carry out direct comparison.

18.5.5. Seasonal items

The implementation of the Regulation 330/2009 (implemented in 2013 and repealed and replaced by Commission Implementing Regulation (EU) 1148/2020), required changes to the index compilation procedures as the indices of Fish, Fruit and Vegetables were compiled using variable weights and the prices of out-of-season products in the Clothing and Footwear division used to be carried forward from the last available in-season price.

Fish, Fruit, Vegetables, Clothing, Footwear, Accommodation Services, Package Holidays and Air Transport Services are treated as seasonal items and fall under the scope of the regulation.

In the case of Fish, Fruit and Vegetables a fixed weighting scheme throughout the year is applied, while assigning a 0 weight whenever an item is out-of-season while maintaining the same weight at the COICOP 4-digit level. In the case of Clothing and Footwear, changes were implemented to ensure that the imputed price is in line with the price trends exhibited by all available products in the same subdivision of ECOICOP/HICP. This implies that:

• In the first month of the out-of-season period, the estimated price is based on the average of the prices of the same product when in-season.
• From the second month onwards, the imputed price is established by comparing the average prices of all available products within the same subdivision of COICOP/HICP to the average of the same products in the previous month. In other words, if in March the average prices have gone up by 1 per cent when compared to February, the imputed price of the out-of-season product is equal to the price established in the first month augmented by 1 per cent.

Not applicable.

Not applicable.