1 Experience of compiling an HICP in Norway CPI workshop Istanbul, October 2011

Norway Norway is not an EU-member Norway is fully integrated into the EU statistical system, through the EEA agreement Norway is part of the EEA agreement together with Iceland and Liechtenstein Norway participate on the HICP working groups meetings in Eurostat –No right to vote, but allowed to make a statement Norway participate in Task Force groups –Groups that are working with specific areas in the HICP, i.e. expanding the COICOP, sampling, etc.

HICP in Norway The harmonised CPI (HICP) was introduced in March 1997 –Time series starts in January 1995 Norway participated in the preparation of the HICP since 1993 Norway is obliged to follow all the regulations for the HICP

HICP and the national CPI The scope and the coverage of the HICP is somehow different then the national CPI HICP: inflation index and domestic approach –Norwegians and foreigners consumption in Norway National CPI: Cost of living index and resident approach –Norwegians consumption in Norway and abroad Index reference period is different: –HICP: 2005 –CPI: 1998

HICP and the national CPI, cont. The price data used in the CPI is used in the HICP as well HICP is covering around 83 % of the national CPI The following groups are left out: –Owner-occupied housing – included in 2014? –Games of chance – Eurostat is working out a method –Life insurance – left out by definition –Financial Intermediation Services Indirectly Measured (Fisim) –left out by definition

HICP and the national CPI, cont. All regulations is input to decide the methods in the CPI CPI and HICP coincide in methods for almost every area Exception is OOH: –rental equivalence in the CPI, –net acquisition is part of a pilot study in Eurostat But scope and coverage do not coincide!

HICP and users HICP is used to compare price growth between countries CPI is used to measure the price growth faced by Norwegian households –In practice this means the inflation in Norway The national CPI is more used due to: –A longer time series –Covers more expenditures –CPI with constant taxes is related to the national CPI –More ”well-known” –Dissemination - press release for HICP is not so focused as the national CPI

HICP in the future Will (probably) cover OOH – net acquisition –Purchase of dwellings will be a part of the HICP A national HICP with constant taxes (HICP-CT) will be developed –A regulation for HICP-CT will soon be concluded The time series become better each year Will the users in Norway prefer HICP to the national CPI?

HICP in the future, cont. But what about the domestic approach ? Is this approach possible when consumers are doing their purchases on the internet from foreign enterprises? –HICP should measure price growth in the Norwegian territory Is purchase from foreigners enterprises on the internet still consumption expenditure that takes place in the Norwegian territory