**Import Price Index (IPI)** measure changes in the prices of imports. Import is every product that was not produced in Albania but imported from a third country or supplied from another.

**Coverage**

Sector coverage of index:

- Section B Mining and quarrying
- Section C Manufacturing
- Section D Electricity, gas and steam supply
- Section E Water supply, sewerage and waste.

**Classification system**

The classification used for these statistics is the Statistical Classification of Economic Activities (NACE Rev.2). The data are produced at national level, broken-down by activity grouped in two digits level of this nomenclature.

**Statistical unit**

Observation units are enterprises according to their principal activity belong to the Standard Classification of Activities (CPA 2008), which supply or import products from foreign markets. The survey covers all the enterprises engaged in production activity, and also those engaged in trade activity. One of the conditions that must be fulfilled in order for an enterprise to be included in the survey is that it supplies the products on the Albanian market. The sources for selecting enterprises are the Annual Survey on Industrial Production and Custom Data.

**Statistical population**

For IPI are all active enterprises that according to Statistical Business Register are operating in the sections: B, C, D, E.

**Base period**

Base period for the IPI is the year 2020=100

**Reference period**

The reference period of IPI survey monthly but published quarterly.

**Data collection**

Data collection is carried out through the “Import Price Survey”. The prices are collected from a sample of statistical units. Completion of the information is relayed by direct interview by the interviewer with the contact person of the enterprise who is charged to declare the data.

**Questionnaire**

The questionnaire of Import Price Survey includes:

- The identification part, which provides information on the name of the enterprise, name of the president, address, fiscal code, legal form, etc.
- The technical part in which information is obtained on monthly prices and product specifications.

**Method of calculations**

The method used for calculation of index is “chain-index” so new weights are assigned each year. For calculation of products ‘weights of Import Price Index are used data coming from Foreign Trade statistics.

The weighting are done on the unchained data. Either on price relatives or on index numbers (price relatives multiplied by 100). The index formula used is of the Laspeyres type (sometimes referred to as Lowe since the weights actually corresponds to Y-2 and not Y-1).

**The weighting formula:**

In this chain-index each transaction will be compared with its previous year December price. These price relatives will be weighted together to give index numbers for each product group, and so on to give index numbers for the total IPI. Hence, we will end up with monthly indices having December previous year as a base. These indices will then be chained to the previous indices for each year all the way back to the base. Note that all chaining will be done after weighting together the index numbers.

**Price ratio**

Is calculated automatically whenever price is entered, adjusted or imputed. The price ratio is also automatically adjusted when the base price is adjusted. One price ratio is calculated for each product each month. It is the current price divided either by the actual base price or by an adjusted base price.

**Weighting**

Arithmetically weighted averages of individual observations form the index numbers. The index (short-term-link) for a 6-digit NACE is calculated by multiplying all weights by their corresponding index numbers (price ratio) then divided by the sum of the weights.

**Imputation**

The imputation is done by multiplying the previous reported price by the average monthly price movement of the closest higher level of aggregation (6-digit or 2-digit).

**Index calculation**

For calculation of index is used Laspeyres type and is calculated as following:

The first part before the equal sign is stating the price level of December 2011 in percent of the average price level during 2012, hence adjusting the average of 2020 to 100.

The second term is the chained index movement from December 2011 to December y-1 (a product of yearly index links [short-term-links] from December to December). The last part is showing the movement from December y-1 to month m year y.

**Measures of index**

**The annual change** measures the price change between the current quarter and the same quarter of previous year. This measures is responsive to recent changes in price levels but can be influenced by one – off effects in either quarter.

**Quarterly change** measures the price changes between current quarter and previous quarter.