Euro Area Inflation Estimated at 4.0%
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4% Euro Area inflation is very similar to the U.S. Inflation
rate. On June 30, 2008 the
Eurozone released what they call a "Flash" estimate of their
inflation rate for the month of June. It is provisional
and could be modified before the final release. But they claim
it is 95% accurate.
Calculating Inflation in the EuroZone is more
complex than for a single country. Their individual
country inflation calculations are called HICPs (Harmonised
Indices of Consumer Prices).
While the combined inflation rate is called "The
Monetary Union Index of Consumer Prices" (MUICP) which is a
weighted average of member states using their individual HICPs
and combining them based on country weights which are computed
every year reflecting the country’s share of private final
domestic consumption expenditure
in the EMU total.
Here is the basic substance of the June
30th Release:
Flash estimate – June 2008
Euro area inflation estimated at 4.0%
Euro area 1
annual inflation2
is expected to be 4.0% in June 2008 according to
a flash estimate issued by
Eurostat, the Statistical
Office of the European Communities. It
was 3.7% in May3.
Computation of flash estimates
Euro area inflation is measured by the
Monetary Union Index of Consumer Prices (MUICP). To compute the
MUICP flash estimates, Eurostat uses early price information
relating to the reference month from Member States for which
data are available 4
as well as early information about energy prices.
The flash estimation procedure for the MUICP
combines historical information with partial information on
price developments in the most recent months to give a total
index for the euro area. No detailed breakdown is available.
Experience has shown the procedure to be reliable (14 times
exactly anticipating the inflation rate and 10 times differing
by 0.1 over the last two years). Further information can be
found in Eurostat News Release 113/2001 of 5 November 2001.
- 1. The Member States of the euro area are Belgium,
Germany, Ireland, Greece, Spain, France, Italy, Cyprus,
Luxembourg, Malta, the Netherlands, Austria, Portugal,
Slovenia and Finland.
- 2. Annual inflation is the price change between the
current month and the same month of the previous year.
- 3. See News Release 85/2008 of 16 June 2008.
- 4. The MUICP flash estimate usually includes early price
information representing approximately 95% of the euro area
total consumption expenditure weight (see News Release
53/2006 of 28 April 2006).
Issued by
Eurostat Press Office
For
Inflation
Rates for Other Countries we have compiled a list of links
to the appropriate sites.
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