28 Jun Finalization of Puntland Consumer Price Index (CPI) Methodology Improvement Mission and the Development of the New CPI Model
The consumer price index is used to gauge changes in the prices of goods and services purchased by a typical consumer. The objective here is to monitor how the cost of living and purchasing power of citizen changes through computing the inflation rate. Therefore, enhancing the representativeness of selected goods and services, ensuring the quality of data used and standardization of calculation methodology are three fundamental dimensions for ensuring the reliability and the validity of the CPI and the determination of that macroeconomic policymakers’ judgments and decisions toward inflation control are based on contextually reliable evidence analysis.
Over the last five months, Puntland statistics department’s consumer price index team has been reviewing and working hard on improving its CPI calculation methodology. Previously, the CPI contained only six categories of goods and services with a total of 127 items. Additionally, the fluctuations, inconsistency, inaccuracy and volatility levels of our old CPI format was relatively very high.
Based on the existing gap and the need to adapt the international standards for CPI calculation methodology, we reviewed and adjusted the historical data inconsistency and volatility to ensure the data quality, we also upgraded and scaled the structural format of Puntland CPI according to international principle of Classification of Individual Consumption According to Purpose (COICOP) system, which is an international approach for categorizing consumption expenditures incurred by economic agents. the new CPI structure contains 12 categories of goods and services of 387 items whose prices are collected from the markets of the Major three cities (Bosaso, Galkacyo, and Garowe) four times in each month. The new model is a well comprehensive and coherent in terms of structure, more correct, clear and stable in terms of the quality and the movement of data.
Puntland Statistics Department will regularly and officially publish a very detailed report of the monthly consumer price index on the 15th day of each month on its website and will post the report on its social media platforms like Twitter and Facebook accounts to ensure the public outreach level.
Finally, we would like to thank Statistics Sweden for its technical and capacity upgrading support provided by the Puntland CPI team to determine the achievement of this great milestone of standardization of Puntland CPI calculation methodology. we also would like to thank Mr, Rohan Draper for his dedicated commitment and hard work attitude, the energy and the unconditioned effort and the long hours he spent in reviewing, clearing and structuring the model files and data. Working with Rohan was learning in action experience to the Puntland CPI team.