When trade unions and employers’ representatives negotiate the next wage and salary increases, inflation is always a key benchmark – employees at least want inflation to be offset. It is about the increase in the price of a representative basket of goods compiled by Statistics Austria, which contains more than 700 goods and services.
The indicator for inflation is the consumer price index (CPI), which measures the development of the price level at the consumer level – in July 2022 it was 112.5 (based on 2020), the price increase compared to the previous year was 9.3 percent. In August 2022, annual inflation was 9.1 percent according to a quick estimate by Statistics Austria.
Not only salary negotiations are based on the CPI as an indicator of value retention, but also, for example, rental contracts or maintenance payments. The CPI is based on the domestic concept and includes all Austrian spending, also abroad. On the other hand, the internationally comparable HICP (harmonized index of consumer prices, which is used to calculate the inflation rate for the EU) is based on the domestic concept, which means that expenditure by tourists in Austria is also taken into account.
Shopping cart divided into twelve consumption groups
The basis for calculating the CPI are monthly price surveys carried out in 20 Austrian cities by the city administrations and centrally by Statistics Austria. The development of the prices for a fictitious basket of goods and services with more than 700 goods and services is observed, which is intended to represent the consumption of households in Austria as well as possible.
The goods and services in the shopping basket are divided into twelve consumption groups: housing, water, energy; Traffic; restaurants and hotels; leisure and culture; food and non-alcoholic beverages; alcoholic beverages and tobacco; household effects and ongoing maintenance of the house; health care; clothing and shoes; messaging; education and teaching; Various goods and services.
- In the national consumer price index, spending on Housing, water and energy with 18.9 percent the largest share of the shopping cart.
- Find out Transport (13.7 percent), restaurants and hotels (12.7 percent), leisure and culture (11.4 percent), and food and non-alcoholic beverages (11.4 percent).
The weighting should reflect the consumption behavior of the households as well as possible, so that the individual goods are taken into account according to their share of expenditure in the inflation calculation. The basis for the weighting are consumption surveys, but also tourism statistics or sales statistics.
Inflation is perceived as higher
Many consumers also have doubts about the official inflation figures because they personally feel that inflation is much higher. According to federal statisticians, this is due to the fact that the prices for consumables that are bought particularly frequently have always risen above average in recent years. In order to show this “perceived inflation” as well, there is the mini and micro shopping cart. The mini-basket contains 60 goods and services and represents the weekly purchase, while the micro-basket contains 20 goods for daily purchases.
Personal shopping cart can look completely different
It is important to remember that the proportion of expenditure relates to the average total expenditure of all private households in Austria – your personal basket of goods can therefore look very different. That’s how they have Apartment rents only account for 5.4 percent of the shopping basket – but that is the share of rents in the total expenditure of all private households in Austria, emphasize the experts from Statistics Austria. However, around half of the households live in their own houses or condominiums. In addition, the 5.4 percent does not include operating costs, heating or electricity costs.
The share of electricity, gas and other fuels in the shopping basket also appears low at just over 4 percent and one might ask why energy costs can then be such a driver of inflation. Here one must not forget, however, that these 4 percent are only the direct expenses for electricity and gas – the sharp increase in energy prices can be found in the price increases for many other goods.
Source: Nachrichten