Inflation Rate remains Negligible
According to the October Consumer Price Index release from the Statistics Division the country’s inflation rate remains negligible at 1.3%.
Food prices exhibited the largest increase over the twelve-month period as reflected in a 3.5% increase in the Food Index. This increase was reflected in eight of the nine subgroups including vegetables (8.1%), milk, cheese, and eggs (4.9%), fish & seafood (4.1%) and fruits (3.0%). %. The index for Non-Alcoholic Beverages increased 2.5% resulting from average price increases for Soft Drinks and Concentrates and Fruit and Vegetable Juices.
The index for Furnishings, Household Equipment and Routine Household Maintenance rose 16.7% while the index for Miscellaneous Goods and Services increased by 5.3%. The index for Alcoholic Beverages, Tobacco and Narcotics increased by 3.0%.
In contrast, there were declines in the indexes for Housing, Water, Electricity, Gas and Other Fuels (-2.6%) and Clothing and Footwear (-3.3%).
The index for All Items Less Food and Energy increased 2.1% over the past twelve months.
A month to month comparison in prices reflected a 0.6% increase for the month ending October 2020 over September 2020. The Food index increased by 1.5% over the month. Notable increases were recorded in the index Fish and Seafood rose (6.4%), a larger increase than the 1.6% rise in September. The sub-categories of Fresh Chilled and or Frozen Fish and Seafood rose 19.7% and the sub-category Preserved or Processed Fish and Seafood increased by 1.6%. The Index for Milk, Cheese and Eggs increased by 3.1%.
The index for Fruit increased by 2.5% as the index for Fresh and Chilled Fruits recorded an increase of 6.8%. The index for Vegetables rose 1.7% following a marginal 0.1% increase in the previous month. The index for Furnishings, Household Equipment and Routine Household Maintenance increased by 12.5%.
Noteworthy too, is the 13.8% increase in the index for Recreation and Culture which had fallen 8.6% in July. The increase was linked to an increase in the price for consumer durables used for entertainment, such as televisions.
The Index for All Items Less Food and Energy increased by 1.7% after declining 1.8% in September.
Understanding the CPI – What are the Weights
Weights can be considered in the same way we would express how much we spend on various goods and services each month. Just like a monthly salary can be broken down as 20% on rent, 25% food, 15% mortgage, 10% on utilities and so on, the CPI weights are a collective expression of how households would generally spend their monthly income on goods and services. The weights for this series of CPI were drawn from a survey of a sample of households in 2006 (the base period). Each household was asked to keep a record of their expenditure for one month. Once completed, the expenditures were added to determine the pattern. This pattern is what is referred to as the weights. The current weights assume that each month, households would spend the most on Accommodation (218.3) followed by Food (214.2) and Transportation and Communication (153.5). Households would also spend the least on Alcoholic Drink and Tobacco (1.6) – Source: Statistics Division