The core inflation index is a seasonally-adjusted index which allows us to observe deeper trends in the changes in prices.
It presents the fundamental growth of production costs and the relationship between supply and demand.
It does not include prices which are subject to government intervention (electricity, gas, tobacco etc.) and products whose price is highly volatile (petrol, seasonal produce, dairy products, meats, flowers and plants etc.) which experience high variability due to climatic factors or tensions on the global markets.
The core inflation index is corrected for tax measures (rise or fall in VAT, specific measures imposed on products etc.) in order to neutralise the effect on the price index of variations in indirect taxation or government measures which directly affect consumer prices. Core inflation is thus better suited to analysis of inflationary tensions, as it is less sensitive to exogenous phenomena.