A NEW inflation series for tracking consumer level price information has been released by the Solomon Islands National Statistics Office (SINSO) last week.
The third (3rd) series which covers Honiara and other urban centres-Auki, Gizo and Noro present a better picture of the price behaviour at the consumer level.
The new Indices available for 12 major groups. These include;
• Food and non-alcoholic beverages
• Alcoholic beverages, tobacco and narcotics
• Clothing and footwear
• Housing, water, electricity, gas and other fuels
• Furnishings, household equipment and routine household maintenance
• Recreation and culture
• Restaurants and hotels
• Miscellaneous goods and services
The base period for the new series is 2017=100.
Meanwhile, in a statement the SINSO clarified that the rebased CPI series 3 is an updated price index series that only measures inflation or determines the level of inflation in a given period, like every month for instance.
“It does not cause inflation nor is it a determinant of inflation – so it cannot cause a foreseeable increase or decrease in inflation. However, one can track or investigate the causes of inflation by, for example, observing the movements in inflation corresponding to specific prices (groups) used in the derivation of the index (Series 3 CPI) such as Food, Transport, Clothing etc.
“The movements in these prices as indicated by inflation for this group are driven by demand and supply factors. For example, on the demand side, consumers may change preferences for wanting to drink coffee rather than tea so prices for tea may go down and prices for coffee go up and vice versa.
“Moreover, the government may change tax policy by increasing taxes on certain goods so prices may go up etc. On the other hand, if the costs for operating a business increases and staff wages increase, there will also be a cost-push effect on prices,” the statement explained.
The Government through the National Statistics Office, Ministry of Finance and Treasury previously released two CPI series and series 3 is the third one.
The outcome of the rebased CPI 3rd series, which has 2017 as the base year, launched by the Government Statistician, Douglas Kimi, last week.
The Consumer Price Index (CPI) Rebase is when the CPI has its weights that is weights of specific goods and services included in the consumption basket, and the basket itself, is reviewed or updated to better reflect the current consumption pattern of households.
The CPI rebase is necessary because the CPI is a measure of changes, over time, in prices of a fixed basket of goods and services representative of the consumption pattern of resident households in the economy.
The rebasing work has been undertaken by the Solomon Islands National Statistics Office (SINSO) with the technical support from the Australian Bureau of Statistics (ABS).