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Published byRosamond Higgins Modified over 7 years ago
What is the Consumer Price Index (CPI)? the average change over time in the prices of: consumer items. goods services that people buy for day – to – day living. It combines economic theory with sampling and other statistical techniques and uses data collected monthly to produce a timely measure of average price change.
Cont. CPI provides an estimate of the price change between any two periods. The CPI follows the prices of a sample of items in 12 main categories of consumer spending—such as food, clothing, shelter, and medical service.
Why is the C P I Important? economic indicator- measure of inflation, effectiveness of economic policy adjusting income payments wage increases. deflator of other economic series price changes inflation-free versions
CPI calculation ItemsWeightBasecurrentCPI Dura 0.982 4.8411.032.24 Dura Fetarita 1.173 3.208.072.96 Yellow maize (Dura Shami) 0.069 4.129.290.15 Millet (Dukhn) 3.314 5.5912.087.16 wheat 0.864 5.7712.341.85 local barley 0.012 1.071.530.02 Imported barley 0.015 1.291.750.02 Egyptian rice ( Imported ) 0.608 2.114.801.39 ∑ PnQo ∑PoQo Example X100
Inflation rates MonthCPI 2008CPI 2009Inflation January 106.0118.011.2 February 106.6118.411.1 March 106.6118.210.9 April 109.6119.08.5 May 110.7120.58.9 June 115.8127.29.9 July 119.4131.29.8 August 122.5135.310.4 September 121.0136.612.9 October 118.6133.912.9 November 117.8134.914.5 December 116.9132.713.4
Why Update the C P I? Updating the CPI basket items, and their weights; represents the current consumption patterns made by Sudanese households. The item’s weight is the share of total household expenditure on the item to total households’ expenditure on all items.
Cont. Used as deflator for GDP in Services Sectors for example : Education, Health …ect. change the base year according to the GDP year using the formula : GDP Current year Changed CPI
CPI basket The last update of the Sudanese CPI basket items was in 2007 based on the HBS that conducted in 2007. The previous basket of the CPI was based on 1978.
Weights reflects contribution to total expenditures of households. determines the impact that its price change will have on the overall index.
CPI Calculation Laspeyres formula is used for the calculation. CPI basket consists of 663 items and the consumer basket consists of 944 items. cut of 0.005 temporarily missing and seasonal items are treated by distributing their weights at the other items in the same expenditure group. Prices for fruits, vegetables, fresh meat, and fish food are collected on a weekly basis.other items are collected once a month. The base year is 2007 for all the 15 northern states. CPI is compiled for each state and for Sudan at the levels: state/ urban, state/ rural, and state.
CPI S TRUCTURE Step1: Data/ Prices entry process - geographic areas and geographic weights. ∑ PnQo ∑PoQo *100
Cont. Step2: Calculation of relative prices and new weights, by dividing the current price by base year price. In addition, the new weight is calculated by multiplying the relative price by the base year weight. Step3: To compute the minor group level, new weights for sub-minor groups within the minor group are aggregated and divided by the base year weights. The same procedures are done to calculate the Index at the major group level and finally for the general Index.
CLASSIFICATION SYSTEM 12 Divisions47 Groups117 Classes12 Divisions41 Groups12 Classes COICOP Sudan
Used as deflator for GDP in Services Sectors for example : Education, Health …ect. change the base year according to the GDP year using the formula : GDP Current year Changed CPI X 100
COICOP Code - Expenditure group Consumption Group Sudan/ Urb Sudan/ Rur Sudan Total 100.0 01 - Food and non-alcoholic beverages 43.462.052.9 01.1 - Food 41.359.050.3 01.1.1 - Bread and cereals (ND) 8.613.311.0 01.1.2 - Meat (ND) 9.813.811.8 01.1.3 - Fish and seafood (ND) 0.80.40.6 01.1.4 - Milk, cheese and eggs (ND) 4.8 01.1.5 - Oils and fats (ND) 220.127.116.11 01.1.6 - Fruit (ND) 18.104.22.168 01.1.7 - Vegetables (ND) 6.811.99.4 01.1.8 - Sugar, jam, honey, chocolate and confectionery (ND) 22.214.171.124 01.1.9 - Food products n.e.c. (ND) 1.42.01.7 01.2 - Non-alcoholic beverages 2.13.02.5 01.2.2 - Mineral waters, soft drinks, fruit and vegetable juices (ND) 0.91.00.9
CPI weights for the main groups and minor groups for food Consumption Group Sudan/ Urb Sudan/ Rur Sudan 03 - Clothing and footwear 126.96.36.199 04 - Housing, water, electricity, gas and other fuels 18.310.214.2 05 - Furnishings, household equipment and routine household maintenance 188.8.131.52 06 - Health 184.108.40.206 07 - Transport 220.127.116.11 08 - Communication 18.104.22.168 09 - Recreation and culture 22.214.171.124 10 - Education 3.52.02.7 12 - Miscellaneous goods and services 126.96.36.199
CPI weights for the main groups Khartoum old Weight CodeDescription M Weight 10000Total Food,Drink & Tobacco 0.6378 20000Total Clothing,Shoes 0.0281 30000Total Rent And Fuels 0.1057 40000Total Household Opern 0.0368 50000Total Health Care 0.0090 60000Total Transport,Etc 0.0601 72000Total Entertainment 0.0172 74000Total Education 0.0146 80000Total Miscellaneous 0.0907 000Total Weight 1.0000
Consumer Price Indices 2008 -2009
Monthly Inflation Rates for Northern States 2008-2009
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