​​​​​Retail Price Index: September 2020​​

12 October 2020 | 1100 hrs | 165/2020

Retail Price Index: September 2020

1. Main points

• In September 2020, the annual rate of inflation as measured by the Retail Price Index (RPI) was 0.18 per cent, down from 0.42 per cent in August 2020 (Table 2).
• The twelve-month moving average rate for September stood at 0.90 per cent (Table 2).¹
• The largest upward impact on annual inflation was measured in the Food Index, while the largest downward impact was recorded in the Transport and Communication Index (Chart 3).

Chart 1. Inflation rates

per cent

2.00

1.75

1.50

1.25

1.00

0.75

0.50

0.25

0.00

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S
2018			2019	2020
			period
		Annual rate			12-month moving average rate

Details on the compilation of the RPI within the context of COVID-19 are available in the methodological notes.

1 This rate of inflation, that factors in aspects of seasonality, is widely used in Malta to make cost-of-living adjustments. It is also used to update the index of inflation in continuation of the Schedule to the Housing (Decontrol) Ordinance (CAP.158, Art.13) of the Laws of Malta, on the basis of the All Items Retail Price Index.

Compiled by: Price Statistics Unit

Contact us: National Statistics Office, Lascaris, Valletta VLT 20001 T. [phone], E. [e-mail]

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2. Overview

The Retail Price Index measures monthly price changes in the cost of purchasing a representative basket of consumer goods and services, and is closely linked with the cost-of-living adjustment (COLA) increases and periodic rent payment adjustments. A closely related measure of price movements is the Harmonised Index of Consumer Prices (HICP). For a description of the differences between the RPI and the HICP, refer to Section 5.2 of this release.

Each monthly RPI News Release includes three different measures of inflation:

1. The annual inflation rate measures average price changes between the reference month and the same month of the previous year. Although responsive to recent changes in price levels, this measure can be influenced by one-off effects in either month.
2. The monthly inflation rate compares price changes between the reference month and the previous month. This measure can be highly influenced by seasonal effects.
3. The 12-month moving average rate overcomes the volatility of the above two rates by comparing the average of the latest 12 indices to the average of the previous 12 indices. This measure is less sensitive to temporary changes in prices. Thus, this rate is used for the computation of the COLA and adjustments in wages, rents, etc.

3. Price changes and effects on inflation

Table 1 shows that the highest annual inflation rates in September 2020 were registered in the following main groups: Personal Care and Health (2.81 per cent) and Housing (2.55 per cent). On the other hand, the lowest annual inflation rates were registered in Recreation and Culture (-2.66 per cent) and Household Equipment and House Maintenance Costs (-2.40 per cent).

Table 1. RPI group indices

December 2016=100

	Weight		Indices		Annual	Monthly
Group			rate (%)	rate (%)
(%)
	Sep 2019	Aug 2020	Sep 2020	Sep 2020	Sep 2020
Food1	21.49	106.84	108.30	108.08	1.16	-0.21
Beverages and Tobacco	5.56	104.32	106.19	106.22	1.82	0.03
Clothing and Footwear	6.62	82.11	81.22	83.54	1.74	2.86
Housing	7.90	102.81	105.38	105.43	2.55	0.05
Water, Electricity, Gas and Fuels	3.31	100.81	100.29	100.29	-0.52	0.00
Household Equipment and House Maintenance Costs	6.97	102.69	100.81	100.22	-2.40	-0.58
Transport and Communication	22.10	105.08	103.31	103.46	-1.54	0.15
Personal Care and Health	8.81	103.18	105.97	106.08	2.81	0.11
Recreation and Culture	9.90	104.35	101.58	101.57	-2.66	-0.01
Other Goods and Services	7.34	102.24	103.55	103.26	0.99	-0.28
All Items	100.00	102.96	103.05	103.14	0.18	0.09

• including restaurant services and take-aways

Chart 2. Annual inflation rates by the 10 main groups: September 2020

All Items										0.18
Personal Care and Health															2.81
Housing														2.55
Beverages and Tobacco													1.82
Clothing and Footwear												1.74
Food¹												1.16
Other Goods and Services												0.99
Water, Electricity, Gas and Fuels						-	0.52
Transport and Communication				-	1.54
H/hold Equip. & House Maint. Costs			-2.40
Recreation and Culture		-2.66
-4.0	-3.0	-2.0	-1.0	0.0	1.0	2.0	3.0	4.0

per cent

• including restaurant services and take-aways

2

Chart 3 depicts the impacts on the annual inflation rate by the 10 main groups. An impact is a measure showing the change in inflation as a result of the inclusion of an index. Such an impact takes into account both the weight and the annual rate of inflation by group.

In September 2020, the largest upward impact on annual inflation was registered in the Food Index (+0.25 percentage points), largely due to higher prices of fruit. The second and third largest impacts were measured in the Personal Care and Health Index (+0.25 percentage points) and the Housing Index (+0.20 percentage points), mainly on account of higher prices of hairdressing services and house maintenance services respectively (Chart 3).

On the other hand, the largest downward impacts on annual inflation were registered in the Transport and Communication Index (-0.34 percentage points), the Recreation and Culture Index (-0.26 percentage points) and the Household Equipment and House Maintenance Costs Index (-0.17 percentage points), mainly reflecting lower prices of fuels, education fees and furniture respectively (Chart 3).

Chart 3. Contribution to the annual inflation rate by the 10 main groups: September 2020

Food¹															0.25
Personal Care and Health															0.25
Housing															0.20
Clothing and Footwear												0.12
Beverages and Tobacco												0.10
Other Goods and Services										0.07
Water, Electricity, Gas and Fuels								-0.02
H/hold Equip. & House Maint. Costs				-0.17
Recreation and Culture		-	0.26
Transport and Communication	-0.34
-0.4	-0.3	-0.2	-0.1	0.0	0.1	0.2	0.3
						percentage points

• including restaurant services and take-aways

Note: A percentage point is the arithmetic difference between two percentages.

Table 2. Inflation rates by month and year

		2018		2019		2020
Month	Annual rate	12-month	Annual rate	12-month	Annual rate	12-month
moving	moving	moving
	(%)	average rate	(%)	average rate	(%)	average rate
		(%)		(%)		(%)
January	0.87	1.30	1.49	1.21	1.34	1.63
February	0.98	1.24	1.92	1.29	1.03	1.55
March	0.82	1.18	1.89	1.38	1.11	1.49
April	0.84	1.13	1.91	1.47	0.83	1.40
May	0.95	1.10	1.87	1.54	0.66	1.30
June	0.97	1.07	1.90	1.62	0.72	1.20
July	1.00	1.04	1.68	1.68	0.62	1.11
August	1.12	1.04	1.75	1.73	0.42	1.00
September	1.64	1.08	1.41	1.71	0.18	0.90
October	1.62	1.11	1.36	1.69
November	1.59	1.13	1.36	1.67
December	1.49	1.16	1.18	1.64

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4. Aggregates

Table 3. Inflation rates for RPI aggregates: September 2020

Group	Aggregates (respective % weight)	Annual rate	Monthly rate
(%)	(%)
Food (21.49 %)	Food excluding restaurant services and take-aways (15.60 %)	1.35	-0.33
Restaurant services and take-aways (5.89 %)	0.67	0.10
	Beverages (2.81 %)	2.39	0.10
Beverages and
Served beverages in restaurants and take-aways (1.16 %)	2.78	-0.11
Tobacco (5.56 %)
	Tobacco (1.59 %)	0.00	0.00
Clothing and	Clothing (5.45 %)	2.49	3.40
Footwear (6.62 %)	Footwear (1.17 %)	-1.25	0.67
	Rent (1.08 %)	4.49	0.85
Housing (7.90 %)
Materials for house maintenance (3.70 %)	2.08	-0.16
	Services for house maintenance (3.12 %)	2.40	0.00
Water, Electricity,	Water and electricity (3.06 %)	0.00	0.00
Gas and Fuels
Gas and fuels (kerosene) (0.25 %)	-6.17	0.00
(3.31 %)
Household	Furniture and furnishings (3.59 %)	-2.72	-0.20
Equipment and
Carpets and household textiles (0.76 %)	-12.82	-7.60
House Maintenance
Costs (6.97 %)	Household appliances and utensils (2.62 %)	0.86	0.62
Transport and	Transport (16.57 %)	-2.02	0.20
Communication
Communication (5.53 %)	-0.05	-0.02
(22.10 %)
Personal Care	Medical services and medicinals (4.14 %)	1.99	0.06
and Health (8.81 %)	Personal care products and services (4.67 %)	3.54	0.14
	Sports related equipment (0.54 %)	-2.56	-0.52
Recreation and
Educational fees and related expenses (2.04 %)	-11.22	0.39
Culture (9.90 %)
	Other recreational articles and services (7.32 %)	-0.41	-0.06
	Jewellery, watches and other articles (1.13 %)	-1.56	-1.99
Other Goods and	Non-durable household goods (1.72 %)	2.00	-0.05
Services (7.34 %)	Veterinary services (including pet food) and domestic services (1.40 %)	1.63	0.17
	Insurances, financial services and other services (3.09 %)	1.08	-0.02

In September, the Personal Care and Health Index registered the highest annual inflation rate of 2.81 per cent (Table 1), of which Medical services and medicinals registered an annual rate of 1.99 per cent and Personal care products and services registered an annual rate of 3.54 per cent (Table 3).

The Recreation and Culture Index registered the lowest annual inflation rate of -2.66 per cent (Table 1), of which Sports related equipment registered an annual rate of -2.56 per cent, Educational fees and related expenses registered an annual rate of -11.22 per cent and Other recreational articles and services registered an annual rate of -0.41 per cent (Table 3).

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