CPI is obtained by comparing through time, the cost of a fixed basket of commodities purchased by consumers. Since the basket contains commodities of unchanging or equivalent quantity and quality, the index reflects only pure price movements. Price movements of the goods and services represented in the CPI are weighted according to the relative importance of commodities in the total expenditures of consumers.

Table 1 and Figure 1 show fluctuations in the general level of prices in Puntland. As can be seen in Table 1 there are three-digit figures since 2008 in Garoowe. In the first quarter of 2011 the rate of inflation in Puntland has reached 114.87% with respect to the base year 2005 which shows an increase of 34.91% with respect to the last quarter of 2010. Prices have increased in quarter three due mainly to an increase in prices in Bossaso (Table 1). Both Bossaso and Garowe have shown a decrease in prices in the fourth quarter of 2012. Therefore, the inflation rate of Puntland has fallen to an average of 61.83% in 2012 with respect to the base year 2005. Although Bossaso has shown a decrease in prices in the first quarter of 2013 Puntland prices have increased to 82.745% from the last quarter of 2012 due to an increase in prices in Garowe. There is a slight increase in the overall price level for the fourth quarter of 2016 reaching an average of 105.56% with respect to the base year of 2005. This figure shows a decrease of 21.7% with respect to the third quarter of 2016. The overall inflation rate is 115.96% for 2016 with respect to the base year. (See Table 1 & Figure 1).
With regard to the foreign exchange regime in Puntland we have observed that for the first time in the history of Puntland, and indeed in Somalia in general, there is a declining trend in the market exchange rates and since August 2011 it is below the level (around SoSh20.99 in December 2012 per US$) of the official exchange rate of SoSh30, 000 per US$ (See Table 2 & Figure 2).
A recent report by an economic committee set for this purpose have come to a sensible proposal to collect import-export duties in solely US $’s.
Mobile Phones Money Transactions (SAHAL)
Sahal is a Golis Telecom service allowing customers to transfer money using a mobile phone. It has solved the crucial problem of finding smaller denominations of the USD since the SoSh currency notes are disappearing from Puntland circulation after the Government stopped printing them due to inflationary pressures.