Latest CPI series announced

Department of National Planning has released a newly revised Consumer Price Index (CPI) today. The CPI is used to determine the rate of inflation after reflecting on market price changes.

Talking at an event held at the Finance Ministry today, Deputy Director General of National Planning Mariyam Niyaf said that most counties use the CPI as a method of determining price changes. She said that the new series had to be introduced because the series used until now had been introduced in 2004 and that the market and economy had seen big changes since then.

“No country’s economy will stay the same. Changes will happen. We can monitor performance and development levels using the CPI indicator. A lot of new products and services will be introduced over time. For example, during 2004 and 2012, innovation has brought big changes to mobile phones and TVs. Therefore, we have to make sure that the products from which we derive our prices are the products that are being most widely utilised,” Mariyam Niyaf said.

She said the four major changes have been brought to the series, and that changes have been brought to the products that were used to monitor the prices. Also changes have been made to the weight of the prices being monitored every month. She said that a geometric will be used instead of an arithmetic and that this will help monitor long term price changes.

“Our last CPI reference was in June 2004 which is a very long time ago. We have changed it to June 2012. Looking at the figures of 2009 and 2010, we have seen big changes,” Mariyam Niyafsaid.

She also said that a single report will be compiled henceforth instead of the three separate reports on atolls, Male’, and the country published previously.

She said that inflation had previously been calculated based on yearly figures, and instead, figures will be monitored monthly in the future. Inflation for the month of October 2012 will be calculated comparing the figures of October 2011, she informed.

Speaking at the event, Finance Minister Abdulla Jihad said that changes to the economy can be more accurately measured using the newly introduced series and that it is already late to introduce a new series.

He also said that the new series will be an advantage for the national census scheduled for next year.

Department of National Planning had stated that this new series was put together with the assistance of IMF.