New producer and consumer inflation measures to come in 2013
Business Day - Jul 24th 2012, 08:43
Statistics South Africa plans to launch revamped measures of producer and consumer inflation from the start of next year, with the first publication of the new data due in February.
Revisions to the weightings of goods and services in the existing consumer price index (CPI) will be based on an income and expenditure survey for 2010-11, said Patrick Kelly , executive manager for price and employment statistics at Stats SA.
That survey will be released in September or October this year, at the same time that Stats SA will provide information on the structure of the CPI weights, he said.
The weightings will be revised every three years in the future, compared with every five years as was the case previously, to ensure that the CPI more accurately reflects price pressures in the economy.
It is impossible to gauge what the effect of the changes will be, but there is speculation they could push the consumer inflation rate higher, if it gives products such as food more weighting.
Inflation measured by CPI was 5,5% last month, well inside its 3%-6% official target range.
Stats SA said there would be some additions to the CPI basket of about 400 items. The new index will be linked to the old one through splicing and chain-linking for a smooth transition.
There will be a new, trimmed mean calculation for core inflation, excluding items that show the largest and smallest price changes. It will construct a new rural CPI with food prices collected from those areas.
In November last year, Stats SA said that it would also launch a revamped producer price index (PPI) from July this year, with the first release due in August.
The launch has been postponed, however, and will now coincide with the new CPI figures. The existing aggregate PPI will be broken up into components for agriculture, mining and electricity as well as intermediate and final manufactured goods.
That will reduce the heavy influence of commodity prices on PPI and enhance the indicator’s relationship to CPI. The products in the new PPI will be reweighted every year, compared with every five years now.
At the same time, the number of products listed will be reduced to 273 from 800, to allow for the collection of significantly more prices for each item.
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