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E-cigarettes, coffee capsules enter inflation basket

Most popular goods chosen by agency to measure price pressures

04 February, 19:18
E-cigarettes, coffee capsules enter inflation basket (By Sandra Cordon) (ANSA) - Rome, February 4 - Pre-grated cheese, home pregnancy tests and electronic cigarettes have become so popular in Italian society that they have been added to the 2014 basket of most-frequently consumed goods used in inflation measures, national statistics agency Istat announced Tuesday.

Demand and prices for the 1,447 products in this year's basket are measured monthly by Istat to calculate price fluctuations and inflation rates, and reflects changes in consumer trends and habits.

The new basket, larger than the 2013 version which had only 1,429 items, now includes coffee pods and capsules for automated coffee machines, online newspapers, packaged spreadable cheese, and biodegradable bags for organic waste.

Even pro-biotic yogurt has become a new big thing among consumers, replacing organic yogurt, the agency said as it aims to "grasp the evolution of the spending behavior of consumers".

The list of items in this year's basket includes 19 different cereal and bread products, 10 sorts of alcohol products, 11 household appliances and 26 kinds of cheese, milk, yogurt and eggs.

Goods and services that are no longer included in the Istat shopping basket include repairs for electronics, such as computers and televisions; and women's suits, which have been replaced by dresses. At the same time, Istat adjusted the relative weighting given to different products which is used to try to measure a typical consumer's spending patterns.

Istat raised the relative weight of services over manufactured goods in the basket by about one percentage point.

That reflects a widespread trend to spend more and more on a range of services, from health spas and gyms to medical procedures, cleaners for homes and automobiles, to consultants.

In fact, the price of services has been rising above prices for manufactured goods in Italy for several years, the agency said.

Spending on food and non-alcoholic beverages has been given a higher weighting as well, while the weighting in transportation, clothing, footwear and communications has been reduced.

Istat, which adjusts the consumer basket each year, said that the latest weighting in the basket reflects price movements and consumer-spending trends in roughly equal proportions.

The changes come as Istat reported Italy's annual inflation rate remained flat at 0.7% in January, compared with January 2013.

That was the same level as reported in December and November 2013 and the lowest level since November 2009.

Italy's long recession has made it difficult for businesses to increase prices, holding down inflation and raising concerns about deflation becoming a problem in Italy.

A two-year run of falling gross domestic product (GDP) ended in the third quarter of last year, when GDP was flat with respect to the April-June period.

Measured on a monthly basis, Istat said prices were 0.2% higher in January than in December. The rise in overall costs of services in January included increased costs for parking, municipal water and trash-collection charges, as well as a sharp 1.9% jump in the price of basic servicing costs due to new taxes introduced in the 2014 budget.

Istat's basket of most-frequently purchased consumer goods such as food and fuel dropped to 1.1% in January on an annual basis, compared to 1.2% in December. The Istat inflation surveys also include a regional dimension.

In 2014, the territorial basis of the survey will include 80 municipalities (19 regional capitals and 61 provincial capitals) to gain perspective on local taxes ranging from water and garbage collection fees, taxi and public transit costs, as well as schools and local services including cinemas and parks.