New CPI weights updated using national accounts: Stats SA

Statistics South Africa says due to budget cuts it was not allocated funding to conduct a household expenditure survey which would have informed the requisite updates to the consumer price weights and a basket of goods and services. Statistics South Africa announced the changes to the Consumer Price Index (CPI) weights and a basket of goods and services today.

Chief Director for Price Statistics at Stats SA, Patrick Kelly says due to funding constraints the weights, which represent proportions of consumer expenditure, were updated using national accounts data instead of the Income and Expenditure Survey and the Living conditions survey.

He says the move is still in line with international standards.

“There are really very small adjustments to the weights when we apply the growth factors. If we just take it to the level that probably most of you are more familiar with which is the headline CPI, we could point out the one that increased the most is alcohol beverages and tobacco, a 0, 44% increase and the one that dropped the most is miscellaneous goods and services.  Products, electricity actually, dropped slightly and fuel which is petrol and diesel has increased a bit, goods and services, the split between those is barely changed.”

Kelly says the total number of items in the Consumer Price Index basket was increased from 404 to 415.  New additions to the CPI basket include gin, soundbars and speakers, printer cartridges, printer paper, floor and wall tiles, fabric softener, wipes, makeup and razors.

DVD players and satellite dishes were removed from the basket

“So the items that are coming in are dairy fruit juice blends, which we had previously been in the basket. Cappuccino and coffee sachets, samp which has also been previously in the basket, purée baby food, and jam.  We’ve combined two types of maize meals. So the last number of years we’ve had separate indices for super maize meal and special maize meal. So, special maize meal is not that available typically purchased in the KZN area, quite a lot of operational challenges getting consistent pricing for that.”

[THREAD] What's in and what's out! #StatsSA has updated the #CPI inflation basket, providing insight into how household spending habits have shifted since 2016.

Read more here: https://t.co/xOeJ75HF0A#StatsSA #inflation pic.twitter.com/Ny0FrgO9Ru

— Stats SA (@StatsSA) January 31, 2022

The CPI statistical release for January 2022 will be released on 16 February 2022 using an updated basket of goods and services and corresponding weights.

The CPI weights and basket were last updated in January 2017.