Price
statistics are important because they are used in analyzing
economic activities and in formulating economic policies.
The Consumer Price Index (CPI) is the most widely used and
best known measure of the changes in the cost of living
and inflation. However, none of the currently compiled indices
are reliable indicators of inflation in Sri Lanka.
The Colombo Consumers’ Price Index
(CCPI) and the Greater Colombo Consumers’ Price Index
(GCPI) are outdated and no longer representative as measures
of inflation. The GDP deflator is not an independent indicator.
There is, therefore, a need for a new index to serve as
a general inflation indicator where the reference population
is the entire population. The new CPI should be based on
a specially designed Household Expenditure Survey (HES)
that should be undertaken purely for designing weights for
the CPI.
Only one state authority should be responsible
for the compilation of the CPI and all aspects relating
to data collection, compilation, processing of data to the
release and publication of the CPI should be subject to
confidentiality and statistical legislation. While the need
for a new CPI has been accepted in principle, there has
been no commitment on the part of users and the government
to introduce one. However, the Department of Census and
Statistics should set up a time table to revising the CPI.
Table of Contents
- Nature of CPI
- History of CPI
- Inflation Trends
- Need to Replace the Current CPI
- Issues and Problems
- Conclusions
|
