20141203 - Referential EUR based on HICP (euro area, 2013e)

[Technology]

[<Normal page] [PEREZGONZALEZ Jose D (2013). Referential EUR based on HICP (2013e)³. Knowledge (ISSN 2324-1624), 2014, pages 8-9.] [DOI]

Referential EUR

Referential euro (rEUR, r€) is the real value of the euro (EUR, €) back in 2010, which is used here as referential currency for better understanding the value of money overtime. The referential euro is based on the average annual HICP for the euro area, changing composition (European Central Bank, 2013¹). It is calculated by updating the nominal value of the euro with the appropriate multiplier. The formula for transforming EUR into rEUR follows, while Table 1 provides the correct multiplier (an inflator/deflator multiplier) for the formula.

Formula
rEUR = nominal EUR + (nominal EUR * multiplier)

Table 1. HICP for Europe and rEUR multiplier
Year	HICP A.Avg	Base 2010	multiplier
2008	107.8	109.8	0.0186
2009	108.1	109.8	0.0157
2010	109.8	109.8	0.0000
2011	112.8	109.8	-0.0266
2012	115.6	109.8	-0.0502
2013	117.2	109.8	-0.0631
2014*	120.7	109.8	-0.0904
2015*	124.3	109.8	-0.1169
2016*	128.1	109.8	-0.1426
2017*	131.9	109.8	-0.1676
2018*	135.9	109.8	-0.1919
2019*	139.9	109.8	-0.2154
2020*	144.1	109.8	-0.2382
2021*	148.5	109.8	-0.2604
(Assuming a 3% accumulated inflation rate.)*

References

1. EUROPEAN CENTRAL BANK (2013). 5.1 HICP, other prices and costs. Monthly Bulletin - Euro Area Statistics Online, 11-12-2014, S48. Retrieved from the European Central Bank on 12 December 2014.

2. PEREZGONZALEZ Jose D (2012). Referential EUR based on HICP (2012e). Knowledge (ISSN 2324-1624), 2013, pages 92-93, doi:10.6084/m9.figshare.706372

+++ Footnotes +++

3. The 2013 edition updates the 2012 edition² with the official HICP values for that year.

Want to know more?

MeasuringWorth: A handy website to learn about different inflation indexes and calculate the value of money according to those indexes.
WikiofScience - Referential currency: You will find a full explanation for the concept of referential currency (thus, for referential euros) on this page.