20 February 2014

2014- n° 38

The Consumer Prices Index decreased by 0.6% in January 2014; it rose by 0.7%, year-on-year Consumer price index - final results - January 2014

The Consumer Prices Index (CPI) decreased by 0.6% in January 2014, after a decline by 0.3% in December 2013. Year-on-year, it grew by 0.7% in January 2014 as in December 2013. Excluding tobacco, the CPI decreased also by 0.6% in January 2014 and, seasonally adjusted, it stabilized. The largest downward pressures on the change in the CPI of January 2014 came mainly from winter sales which explained the fall of manufactured product prices. This year, the effect of winter sales is slightly increased by a calendar of price collections fully located during that period. Moreover, as every year in January, some seasonal decreases in prices of services linked with tourism have also contributed to that downturn. The growth of tobacco prices (+2.1%; +5.6% year-on-year), increases in VAT rates and the usual revaluations of some service tariffs in January did not offset those temporary declines in CPI.

In January 2014, the manufactured product prices went down by 3.0% (-1.2% year-on-year) due to the winter sales. The clothing and footwear prices fell by 15.4% in January 2014 and by 4.0%, year-on-year. This was also the same for major appliance prices which declined by 2.2% in January 2014 (-1.7% in January 2013), for those of furniture and furnishings which went down by 2.4% (-2.1% in January 2013; +0.7% year-on-year) and for those of household textiles which fell by 5.8% (-5.7% in January 2013; +0.5% year-on-year). Moreover, the downward pressures in the prices of the technological devices continued (-1.5% and -7.7% year-on-year for the Audio-visual equipment and related products; -2.7% and -14.4% for telephone equipment). Finally, the new scales of ecological malus contributed to increase the new car prices in January (+2.5%; +2.9% year-on-year).

Overall, prices of services increased by 0.3% in January 2014 (+1.7% year-on-year and after +1.4% in December 2013 compared with the same month one year ago), mainly due to the changes in VAT rates. Thus, in January 2014, the prices of maintenance and repair services for the dwellings rose by 2.0% (+3.3% year-on-year), those of the transport equipment by 1.4% (+3.1% year-on-year), those of the restaurants and cafes by 1.1% (+3.0% year-on-year) and those of the recreational and cultural services by 0.6% (+2.0% year-on-year). Moreover, as every year in January,

some tariffs were revaluated. In particular, the tarifs of water supply increased by 2.5% (+3.9% year-on-year), those of the dwelling insurances by 2.1% (+3.2% year-on-year), those of the health insurances by 3.7% (+3.0% year-on-year) and those of the financial services by +1.4% (+2.5% year-on–year). The tariffs of passenger transport by road rose by also in January 2014 (+1.7%; +3.4% year-on-year) as those of combined passenger transports (+2.2%; +2.7% year-on-year). One the contrary, after the end-of-year holidays, air fares fell in January 2014 by 10.4% (-1.7% year on year), as those of accommodation services (-2.3%; +1.1% year-on-year) and those of package holidays (-16.5%; stable year-on-year). Finally, the tariffs of the transport insurances declined in January 2013 (-2.5%; -4.2% compared with the same month one year ago) due to promotions.

In January 2013, energy prices grew by 0.8% (+0.1% year-on-year) due to the increase in electricity (+2.8%; +7.5% year-on-year) and, in a lesser extent, in city gas prices (+0.8% :+0.3% year-on-year) while the petroleum product prices declined slightly (-0.2%; -3.1% year-on-year).

Food prices declined in January 2014 by 0.1% (+0.4% year-on-year). Fresh foodstuff prices decreased usually in January (-1.3%; -1.0% in January 2013, +0.1% year-on-year), fresh fruit prices by 4.6% (as in January 2013, -1.9% year-on-year), whereas fresh vegetable prices remained almost stable (+0.1% ; +1.0% year-on-year). Excluding fresh foodstuffs, the food prices increased slightly in January 2014 (+0.1%; +0.4% year-on-year) but only alcoholic beverage prices were dynamic (+0.8%; +2.7% year-on-year) mainly due to excise duty increases and other taxes.

The core inflation indicator excludes new tax measures. In january 2014, it was corrected from the increases in VAT rates which took place that month while they were probably not totally taken account in most prices especially for the manufactured products. Thus, in January 2014, the core inflation indicator (ISJ) was down 0.4. It rose by 0.1%, year-on-year, in January 2014. The Harmonized Index of Consumer Prices (HICP) went down by 0.6% in January 2013 (+0.8% year-on-year as in December 2013).