Statistics South Africa (Stats SA) has proposed changes to the basket it uses to measure consumer inflation to reflect new technology and social trends, it said on Wednesday.
The new basket would cut the number of products in the consumer price index (CPI) to 386 from 1 124. If accepted, it would come into effect from 2009.
To make the basket more representative, the new criteria for inclusion would be ”the total expenditure on an item, and the number of households which purchased the product”, Stats SA said in a statement on its website.
”The combination of these two approaches serves to exclude any luxury items that may record high expenditure because they are expensive, but are bought exclusively by a small minority of households.”
South Africa’s targeted inflation gauge, CPIX — consumer prices minus mortgage costs — stood at 6,5% year-on-year in July, outside the Reserve Bank’s 3% to 6% target range for the fourth consecutive month. The bank has forecast it will stay outside the band until into 2008.
In a document calling for public comment by October 12, Stats SA proposes the new basket should include products such as minibus taxi prices, funeral costs and insurance, restaurant, take-away and hotel costs, and internet service provider fees.
Lottery ticket prices would also be calculated, while DVDs and CDs would replace VHS and audio tapes in the basket.
The agency would start collecting prices for the new items in the index from January 2008 and publish the new basket and weights from February 2009.
”The CPI will continue to be published on the basis of the current basket and weights until the December 2008 release [published in January 2009],” it said. — Reuters