Statistical Office of the Republic of Serbia (SORS)

Price statistics division

5 Milana Rakica str., Belgrade 11000, Serbia

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

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

European classification of individual consumption according to purpose (ECOICOP)

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

The main statistical variables are price indices.

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

3.6.1. Statistical target population

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

3.6.2. Coverage error population

The target 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 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.

3.7.1. 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

For HICP calculation domestic concept is implemented, in accordance with the requirements for harmonisation of geographic coverage of expenditures. Total monetary expenditure for final consumption of households within economic territory of the Republic of Serbia is covered by HICP, including non-residents' expenditure. For calculation of the HICP index, the territory of Republic of Serbia is covered (starting from 1999 the Statistical Office of the Republic of Serbia does not have at their disposal and may not provide data relative to Kosovo and Metohia. 

Price collections are carried out in 15 towns which are economic and administrative centres. 

3.8.1. Start of time series

The HICP series started in January 1997.

3.8.2. Start of time series - national specifics

The Serbian HICPs with harmonised coverage and methodology have been available since January 2013 and go back to January 2005.

HICP data, 5-digit ECOICOP, are published on Eurostat's website, from January 2016.

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.

European legislation

Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009, stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for HICP production.

Legislation in force and recommendations can be found in the HICP section on Eurostat's website or directly in Eur-Lex, the European Union law portal:

• Framework Regulation (EU) 2016/792
• Implementing Regulation (EU) 2020/1148 

National legislation

https://www.stat.gov.rs/media/2322/zakon_o_statisticie.pdf (Official gazette of RS, No 104/2009).

The confidential data transmitted are used exclusively for statistical purposes and only accessible to staff working in statistical activities. In order to protect individual's information privacy and business interests of business units, only aggregated data are published (observation units are not recognisable either directly or indirectly). Therefore, adjusted contents of the tables are in use and certain rules are applied to protect data (http://www.stat.gov.rs/media/2322/zakon_o_statisticie.pdf (Official gazette of RS, No 104/2009).

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.

Eurostat website: Inflation release schedule.

SORS website: Release Calendar. 

In line with the Community legal framework and the European Statistics Code of Practice, the release policy determines the dissemination of statistical data respecting professional independence to all users at the same time in an objective, professional and transparent manner in which all users are treated.

Monthly

Only Total HICP is published in the Statistical release, along with national CPI, on a monthly basis.

Files with detailed indices are sent to Eurostat in regular periods.

The HICP - Total index is published together with the Statistical release on CPI on the website at 12:00  (local time), on the day of release,  in Serbian as well as in English.

At national level, HICPs are published together with CPI in the following publications: Statistical Release "Consumer price indices by COICOP (mark CN11) available on the SORS website.

From October 2016, in Eurostat HICP database, data from January 2016, on monthly basis, on 5-digit ECOICOP.

None.

None.

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

Short explanation of the HICP methodology is given in Statistical Release: Consumer Price Indices (CN11).

More information about HICP methodology is available on the HICP dedicated section on Eurostat’s website.

Quality Management System of the Statistical Office of the Republic of Serbia (SORS) relies on the Mission and Vision of the official statistics of the Republic of Serbia, as well as on the European Statistics Code of Practice – CoP and principles of Total Quality Management – TQM, which represent the common quality framework of the European Statistical System.

Quality policy: https://www.stat.gov.rs/media/2485/quality-policy.pdf

Quality management system: https://www.stat.gov.rs/en-us/o-nama/sistem-upravljanja-kvalitetom/

System and framework in organisation of quality management of statistical products and processes is in permanent improvement.

11.1.1. Quality management - Compliance Monitoring

Compliance Monitoring

11.1.2. Quality assurance - national specifics

SORS follows the principles of Code of Practice for European Statistics (CoP). Quality Assurance Framework of the European Statistics (QAF) is used for the preparation quality system and implementation of the principles.

11.2.1. Compliance monitoring - last report and main results

Not available.

11.2.2. Quality assessment - national specifics

Development and implementation of an integral system of evaluation and quality measurement, quantitative and qualitative evaluation, self-assessment, internal and external assessment will allow having real view of the situation and determining achievable objectives and quality improvement.

See quality policy: https://www.stat.gov.rs/media/2485/quality-policy.pdf

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

In addition to being a indicator of inflation in Republic of Serbia measured under the same methodology as for the EU, the HICP is also used for analytic purposes (National Central Banks, financial institutions, economic analysts).

No information.

HICP indices and weights are available since January 2005, ECOICOP indices at 5-digit level from 2016 (on Eurostat's website).

The accuracy of source data is monitored by assessing the methodological soundness of price and weight sources and adherence of the methodological recommendations. The goods and services selected for the basket are those of most importance to the customers; have a significant share in total consumption; best reflect the changes of prices of related products. Methodological recommendations are taken into account.

There are a variety of data sources both for prices and weights.

Prices are collected in the field (outlets, craftsmen, supermarkets, markets, etc.), also via the internet and by phone. They reflect the price situation for the whole country. Price collection methods ensure sufficient coverage and timeliness. The outlets are chosen to represent the existing trade and service network and are based usually on the following criteria: popularity with consumers, significant turnover from consumer sales, availability and representativeness of goods and services included in the HICP basket.

Weights are based on the data from NA, on the structure of household final monetary consumption expenditure, HBS, etc. The type of survey and the price collection methods ensure sufficient coverage and timeliness.

The HICPs are subject to sampling errors because they are based on a sample of consumer prices and household expenditures, not the complete universe of all prices/expenditures. The SORS does not produce numerical estimates of HICP sampling errors, which are difficult to quantify due to the complexity of price index structures and due to the common use of non-probability sampling. Consequently, no estimate for a global HICP sampling error could be produced.

The SORS tries to reduce the sampling errors by using a deliberate sample of consumer prices (items and price collections points) that is as large as possible in each geographic area and each item category, in order to minimise the variance of the all-items index.

Every sub-index level contains enough number of elementary aggregates which could show a realistic movement of prices. Principle of representatives is applied.

Non-sampling errors are not quantified. SORS tries to reduce non-sampling errors through continuous methodological and survey process improvements which can help avoiding coding and typing 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 coverage and methodology with the aim of improving reliability and comparability of the HICP. These improvement are regular and do not cause breaks in time series.

However back calculation under the newer standards was performed when appropriate basic data was available.

Differences between national CPI and HICP are based on:

• The weights concept: HICP are based on domestic concept, while national CPI is based on the national concept of consumption.
• Base period: for HICP is December of previous year, while CPI price reference period is the average of the previous year (both for weights and for indices).
• Coverage: HICP covers the consumption expenditure of both resident and non-residents and institutional households within the economic territory of the country, while CPI covers the residents consumption expenditure within the economic territory of the country and abroad.
• Methodology: There are no differences in the methodology which is used in the production of national CPI and HICP.
• Product list: The same product list is in use.
• Treatment of product groups: There are no differences in the treatment of product groups between national CPI and HICP. 

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

HICP data are published as final and are not subject to any revision. Major changes in methodology are announced in advance.

If revision are required in the future according to an error, HICP data series will be revised.

The HICP data are published monthly, as final and are not subject to any revision. Major changes in methodology are announced in advance. If revisions are required in the future according to an error, SORS will revise the HICP.

Starting with January 2016, the reference year of the HICP changed to 2015=100. The change of reference year may cause differences in aggregates between HICP - 2005=100  and HICP - 2015=100, because of rounding effects.

18.1.1. Weights

The weights on 5-digit levels are based on Final Household Monetary Consumption Expenditure data obtained from NA, classified according to the ECOICOP/HICP.

18.1.1.1. Compilation at elementary aggregate level

The weights on 5-digit levels are based on Final Household Monetary Consumption Expenditure data obtained from NA, classified according to the ECOICOP/HICP.

Weights data from NA are adjusted with data from other sources (statistical as well as non-statistical). The weights reference period for 2022 HICP is the year 2021, price reference period — December 2021. The weights are changed every year. The critical weights are adjusted using the most recent statistical data (domestic trade, transport and services, energy statistics) as well as the information from other enterprises. Data for the weights reference period are price updated to the price reference period (December of the previous year).

Detailing of weights' system is made using the information from HBS and other sources.

18.1.1.2. Compilation of sub-index weights

Sub-index weights are compiled from NA data on 5-digit  ECOICOP levels. No cases where sub-index is derived from other sources.

The weights reference period for 2022 HICP is the year 2021, price reference period — December 2021. Data for the weights reference period are price updated to the price reference period (December of the previous year).

Due to COVID-19 and with the aim to make the most realistic weights system, the results of the Household final consumption expenditure in 2021, obtained from National Accounts, are used for HICP weight system in 2022. NA used the procedures of the standard Eurostat Tabular Approach, starting with a large number of diverse statistical and administrative data sources and relying on very different methods. In derivation process recommendations from Eurostat are taken into account. Data are calculated based on Domestic concept.

18.1.1.3. Compilation of sub-index weights

Reference period for higher levels is the same as the lower levels.

18.1.1.4. Weights – plausibility checking

Reliability of weights are checked using all available sources. Data from National accounts are checked using data from HBS, other statistics, data from related Ministry or enterprises.

18.1.1.5. Price updating

Data for the weights reference period are price updated to the price reference period (December of the previous year).

Since the HICP weights were based on the HFMCE data in 2021, the price update done by reducing the value from 2021 to December 2021, which is the basis for the calculation of the HICP, using HICP index on average and December 2021 (12.2021/2021).

Price updating is applied on the most detailed level of HFMCE.

18.1.1.6. Compilation of total household final monetary consumption expenditure

Household final consumption expenditure are mostly obtained from following data sources:

• Quarterly, Q1-Q3 of 2021
• Monthly, available at t+30 days (Retail trade survey and other branch statistics surveys - SS (Agriculture, Trade statistics, Manufacturing, Export-import, Transportation, Energy, Construction etc.)
• Administrative data, t-1 (National Bank of Serbia, Regulatory Agency for Electronic Communications and professional magazines information).

Special attention is paid to subclasses with the bigger changes in weights such as Fuels for personal transport equipment, Transport services, Package holidays. Consumption expenditure are based on last available data from corresponding statistics and external sources.

18.1.2. Prices

Prices are collected on a monthly basis, in all types of shops in which consumers satisfied their needs.

Retail prices comprises prices at which retail trade and service suppliers sell products and supply services to final consumers.

18.1.2.1. Data Source - overview  

For a majority of goods and services, prices are collected on the field, once per month, approximately on the same days of the month.

According to the Methodology, outlets with the biggest turnover are chosen in the sample. Also, all parts of town are covered as well as all shop types. Price collectors give to central staff information/proposals concerning shops and goods/services with main characteristics (shop types, repletion of shops, stability of offer, price level). Consumers carry out their shopping in all shop types: consumers satisfy their daily needs in shops nearby, bigger purchase carried out in bigger shops. Shop sample covered all shop types, market stalls for agricultural products on green market, petrol stations only for petrol prices, specialised shops like pharmacy, bakery, hardware store, etc. The final decision is made by the Central Office staff together with price collectors. In these shops all available products from product list are priced.

For some items and services (electricity, telecommunication services, fuel, mobile phone, cars, railway and plane transport, package holidays) price lists from websites are used (prices are controlled by phone by central staff). Paper questionnaires are used to obtain prices from banks and insurance companies for selected services.

Mail order and internet shopping are insignificant and they are not included in the index.

During the whole year, situation on markets is monitored, and in case consumers change their habits of purchase for some kind of goods, 'new' outlets are selected for price collection.
Due to frequent changes in the market situation (frequent closure or repurposing) during the year, the outlet sample is updated every December for the pricing for the following year.

18.1.2.2. Scanner data - general information

Scanner data are not used yet. Some preparatory research and contact with some store chains has been done. Implementation of scanner data mostly depends on human resources in the future. 

18.1.2.3. Web scraping - general information

Web scraping are not used yet. Implementation depends on human resources in the future and experimental work will be carried out within IPA 2019.

18.1.3. Sampling

18.1.3.1. Sampling design: locations for survey

In the aim of better reliability of the HICP, the whole territory is divided in fifteen organisation units, which are the largest urban and economic centres.

18.1.3.2. Sampling design: outlets

According to the methodology, outlets which are most popular, outlets with the big number of purchasers and big turnover are chosen in the sample. Also, all parts of town are covered as well as all shop types.

18.1.3.3. Sampling design: newly significant goods and services

Central CPI/HICP staff as well as price collectors monitor and explore market through time. When some new good or service reaches significant impact on market and household consumption, then they will be introduced in the HICP from the beginning of the next year. 

Price data is collected every month.

18.3.1. Price collection surveys

Most prices are collected in the field by price collectors visiting the outlets. They have a pre-prepared schedule for outlet visits. Also, they have the precise description of all product-offer which are priced for every outlet. Price collectors are free to initially select a particular product offer for pricing in a particular outlet according to the Methodology and Manual for price collecting.

Centrally price collection is applied in cases of state monopolies and nationally homogeneous prices, about 10% (i.e., cars, insurance, tobacco, post and telecommunication services, package holidays, electricity and fuel prices, financial and insurance services, PC equipment’s, airplane tickets etc.). These prices are collected by phone, via internet, via questionnaire.

Once a year, in November or December, the sample of outlets, products and services is reviewed and updated.

Price collectors are trained workers, regularly employed in Regional Statistical Offices. Depending on town size, the number of price collectors varies from 1 to 4. Meetings with price collectors are held annually and mainly depend on the financial situation. Contact by phone with price collectors are done on a daily basis.

All price collectors have written instructions (Manual) for price collection with the most important details. Instructions about selection of product offers and market segments are part of the Manual for price collection.

18.3.2. Timing of price collection

According to the Methodology and Manual for price collection, different type of prices are collected in different periods. In general, prices are collected from the 1^st to 23^rd every month. For unique prices, the Central Office staff are responsible; while for all other prices (in the field) as well as for item samples, price collectors are responsible. Collected prices are prices of goods and services paid by consumers with all taxes.

For the purpose of organising the observation time in individual months and to cover the whole month, items are classified into following related groups for which prices are observed in a certain period of the month:

• Agricultural products  (observed in the 1^st and 3^rd week)
• Non-food products (between the 1^st and 10^th of the month)
• Food products (between the 11^th  and 14^th of the month)
• Services (between the 14^th and 23^rd of the month)
• Fuels (every Wednesday in the month).

Data validation is carried at different levels of the HICP compilation.

The first control of prices is done by price collectors on the field, before electronically sending price data to the Central office.

Second validation is carried out in SORS by central staff. The Price Statisticians carry out the verification of the data received using the data control program designed for the monthly checks against data entering errors and mistakes. Computerised and manual checks are undertaken at various stages of price and index compilation. The verification sheets contain information on the price data entered and information related to the current and previous months; reasons of price changes indicated by price collectors, ratios of prices for all price quotations, covering all goods and services; the period of the last change of the price observed; the smallest and the highest prices; the coefficient of variation. Errors and questionable entries are marked by certain symbols. Particular attention is paid to quality changes, to prices that do not change for some period of time, to the lowest and the highest prices. In some cases, the dubious price changes are checked by revisiting the outlet. The central staff clarifies all uncertainties with the price collectors via the telephone and e-mail.

18.4.1. Data validation - price data

Data validation is carried at different levels of the HICP compilation.

The first control of prices is done by price collectors on the field, before electronically sending price data to the Central office.

Second validation is carried out in SORS by central staff. The Price Statisticians carry out the verification of the data received using the data control program designed for the monthly checks against data entering errors and mistakes. Computerised and manual checks are undertaken at various stages of price and index compilation. The verification sheets contain information on the price data entered and information related to the current and previous months; reasons of price changes indicated by price collectors, ratios of prices for all price quotations in each territorial units, covering all goods and services; the period of the last change of the price observed; the smallest and the highest prices; the coefficient of variation. Errors and questionable entries are marked by certain symbols. Particular attention is paid to quality changes, to prices that do not change for some period of time, to the lowest and the highest prices. In some cases, the dubious price changes are checked by reference back to the outlet. The central staff clarifies all uncertainties with the price collectors via the telephone and e-mail.

In case of price extremes, after additional checking, if all characteristics are within specified, and if such product is sold at price, this price is accepted.

18.5.1. Elementary price index formulae

HICP is Laspeyres-type index
The index formula for elementary aggregate: ratio of geometric mean prices
                                                                                 I=p_m/p_o
and we do not have alternative formulae 
The number of decimals  is: for observed prices is two,  for weights is four,   for compilation of index all decimals are in use,  for rates of changes, for transmission  number of decimals is in accordance with the minimum  standards for the quality of HICP calculation and HICP data transmission guide, the number of decimals for published index is one.

Truncation is not in use, only rounding.

        I=p_m/p_o     (Individual product Index: ratio of current price and December (base) price)

        p_m=(p₁*p₂*...*p_n)^1/n          (p_m= average price of the product in the locality, p₁= price of the product in the firs outlet, n= number of outlets)

Aggregate indices (at the all level ECOICOP) are weighted arithmetic mean:

                   ∑ (I_p * W_p)  
            I_g= ==========       (I_p= elementary aggregate index, W_p= individual weight,  ∑ W_p= sum of
                     ∑ W                                      individual weights) 

18.5.2. Aggregation of different data sources

Indices on the lowest level ECOICOP (5-digit level),  are weighted arithmetic mean оf elementary aggregates index:

                   ∑ (I_p * W_p)  
            I_g= ==========                          (I_p= elementary aggregate index, W_p= elementary aggregate weight,  ∑ W_p= sum of
                     ∑ W                                      elementary aggregate weights)

Further ECOICOP levels indices are weighted arithmetic mean оf lower level index up to Total.

18.5.3. Chaining, linking and splicing methods

HICP index series with updated weights at the beginning of the year are linked with previous year index series using December as the linking month.

18.5.4. Quality adjustment – Detailed information

Cenex recommendations for Quality Adjustment are taken into account and some recommendations are implemented in the HICP.

For Implicit methods, we use Bridged overlap and Overlap method. These methods mean that prices for replacement and replaced product have to be available for both months and methods are used for minor changes in TV sets, household appliances (refrigerators, cookers, washing machines) and for small changes for cars.

For Explicit methods, we use Option pricing, Package size adjustment, Judgmental QA, and are used for big changes for New cars, Services, Household appliances.

Up until now, statistics about QA are not available, but there is the possibility to include in regular HICP production.

If a new selected product is quoted as comparable, the observed price change is a pure price change. Little change (shape or colour of package and similar) – this change is a pure price change. In this case, the price of new quality is direct compared with the price of old quality and all price change is included in the price index. Mostly, this method is used for food products.

QA conducted in the central office is noted with explanation about old and new specification; automatically QA is not performed yet. Every case is considered separately.

QA is usually implemented for car, household appliances (50% option pricing), and some kind of services (option pricing). 

Direct comparison is carried out for clothing and footwear (or 50% option pricing for major price change), furniture and some kinds of services (repair of the dwelling).

Method 'Link in' prices to show no change is not used.

18.5.5. Seasonal items

Following groups are treated as seasonal: Fruit, Vegetables, Package holidays, Clothing and footwear and some product related to camping.

All-seasonal estimation method is used for price estimation. Weights are constant the whole year. In the first month of out-of-season, price is the typical price (average of prices in-season). For the next month, prices are adjusted (estimated) by price movement of all available products in the same sub-group or division, both for the current and previous month.

Class-confined seasonal weights are not applied.

Not applicable.

None.