WINDHOEK – The Namibia Statistics Agency (NSA) yesterday published a revised consumer price index (CPI) that the agency says provides a much better representation of the spending patterns of Namibians and their experience of inflation. In addition, the revised index addresses some methodological deficiencies and computational errors associated with the current index.
According to the Statistician General, Dr John Steytler, the revised index reflects the greater proportion of a typical household’s expenditure now spent on, for instance housing and associated costs, alcoholic beverages and tobacco, recreation and culture as well as telecommunications.
The CPI measures the changes in the cost of a fixed representative basket of goods and services which involves weighting together aggregated prices for different categories of goods and services so that each takes an appropriate share to reflect the budgets of households covered by the index.
Steytler yesterday also launched a rebased Namibian Consumer Price Index as the current CPI reflects expenditure patterns of Namibians in 1993/1994 and hence does not mirror significant shifts in expenditure patterns that have taken place since then. “The availability of expenditure data from the 2009/10 Household Income and Expenditure Survey has provided the NSA with the opportunity to compile an index that is more typical of current consumer spending. The survey also provides information on the types of products that consumers typically buy. This, together with information from visits to shops in connection with the monthly collection of prices, has been used to review and update the basket of goods and services that the NSA prices each month,” explained Steytler.
Examples of new items introduced to the CPI basket include men and women’s sportswear, garden and patio furniture, power driven tools, motorcycles, driving lessons and vehicle licence fees as well as creches and playgroups. The only two items dropped from the basket are goat meat and peas.
Steytler also noted that, as might be expected, some significant shifts in spending patterns have been observed during recent years. One of these is expenditure on housing, water and electricity, gas and other fuels, which has risen considerably partly reflecting an increase in the standard of housing. “Expenditure has also increased proportionally on alcoholic beverages and tobacco, as well as health and communication. Although total expenditure is still relatively small, communication has seen the biggest percentage increase (300 percent) partly due to an increase in the use of mobile phones,” remarked Steytler.
The NSA has also made a decision to correct the back series of methodological deficiencies and errors on the previously published indices. The consequence is that there will be some backward revisions to previously published annual inflation rates, with some rates being revised upwards and some being revised downwards. Said Steytler: “Nonetheless, the revisions to inflation rates are not indicative of any systematic bias in the inflation figures previously published.”
On a month-on-month basis inflation is 0.4 percent for October 2013 as compared to 0.3 percent for September 2013. On an annual basis inflation declined from 7.1 percent in October 2012 to 4.9 percent in October 2013.
By Edgar Brandt