New inflation basket by 2020
THE NEW basket of goods and services that will be used to track the movement of the Consumer Price Index (CPI) will be ready by early 2020. Director general of the Statistical Institute of Jamaica (Statin), Carol Coy, says the agency’s technicians are now analysing the data collected under the 2017-2018 Household Expenditure Survey.
The CPI is the metric used to determine the weighted average movement of prices and its effect on the cost of living, or inflation.
Statin currently captures prices on over 500 items in a basket that was last revised in 2005.
Statin expects the new survey will lead to adjustments of the items in the basket, but critical to the accurate measurement of inflation is determining the weighting to be assigned to each of the categories of products within it, she told a Gleaner Editors’ Forum.
The top three divisions based on the 2005 survey have food and nonalcoholic beverages weighted at 37.46 per cent; transportation 12.82 per cent; and housing, water, electricity, gas and other fuels assigned a weight of 12.76 per cent.
“We have to establish a base year for the CPI and that base year will be 2019,” she said.
Coy expects many of the current items to remain within the basket, and is not anticipating dramatic changes to the current weightings. Food, she added, could end up with the same weighting it has now.
“”Regardless of how much you spend on other things, the food bill of most households is significantly still the largest. It is true that we’re going to have a shift in some items, but I don’t think it will be of such impact that it will reduce the items,” the director general said.