Monetary Union Index of Consumer Prices (MUICP)

What Is the Monetary Union Index of Consumer Prices (MUICP)?

The Monetary Union Index of Consumer Prices (MUICP) is an aggregate measure of consumer inflation for all countries inside the eurozone. It is distributed month to month by Eurostat, the statistical office of the European Union (EU).

Understanding the Monetary Union Index of Consumer Prices (MUICP)

The Monetary Union Index of Consumer Prices (MUICP) is calculated by taking the weighted average of the Harmonized Indices of Consumer Prices (HICPs) from every country inside the eurozone (additionally called the euro area). Basically these are the countries involving the euro as their currency. Every country's HICP measures the change over the long run in the prices of a basket of goods and services acquired, utilized, or paid for by households inside that country. The term "harmonized" alludes to the way that all countries in the EU utilize a similar methodology — this means that the country indices can measure up to one another, as well as aggregated to form the MUICP.

Eurostat works out the MUICP utilizing data given by the national statistics agency of every member state on price changes and the consumption examples of consumers inside its economy. Eurostat notes that the HICPs "mean to cover the full scope of conclusive consumption expenditure for a wide range of households to give an ideal and important image of inflation."

Methodology and Uses of the Monetary Union Index of Consumer Prices (MUICP)

The baskets of consumer goods and services utilized in the indices are refreshed annually to reflect current spending designs, as are the weightings of every country for the aggregate calculation of the MUICP. Every country's weight addresses its share of total household last monetary consumption expenditure in the eurozone. The initial MUICP was sent off in 1998 with the 11 EU states that were to become members of the eurozone when the euro currency sent off on January 1, 1999. The eurozone currently includes 19 of the 27 EU countries.

The fundamental goal of the European Central Bank (ECB) is price stability, which it characterizes as an annual HICP rate in the euro area of 2% or less. The HICP and MUICP data releases are consequently critical for the ECB in terms of how it sets monetary policy in the eurozone. MUICP is additionally alluded to as eurozone HICP.

Eurostat additionally distributes the European Index of Consumer Prices (EICP), which aggregates inflation across all EU countries (both inside and outside of the eurozone).