EIGHTEEN new items have been added to the Solomon Islands Consumer Price Index (CPI) rebase basket – an outcome of the rebasing, which has 2017 as the base year, launched by the Government Statistician, Douglas Kimi, early this week.
“The 18 new items include some varieties of rice which were not in the shops in 2006, when the basket was last updated, and other services such as recharging (top-up) of mobile phones which is now very popular,” Chief Economic Statistician, Joachim Gaiafuna said.
Mr Gaiafuna said the revised basket now includes new items not previously in the consumption basket.
However, he explained that weights of items in the basket were varied according to the expenditure pattern of Households as derived from most recent 2012-2013 Household Income and Expenditure Survey (HIES).
“No item was removed from the basket,” Gaiafuna said.
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.
“Household preferences change over time, due to the introduction of new consumer goods and services in the market, and so to keep up with these changes, rebasing is necessary for it to remain relevant and accurate.
“The updated consumption basket and weights means our CPI stays relevant and current for its intended purpose,” Mr. Gaiafuna explained.
Mr. Gaiafuna said to remain current and relevant as the CPI is a very important economic indicator for our country. CPI is used mainly to: Assess changes in living standards and Measure inflation or changes in the purchasing power of money
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).