UST

What is the Consumer Price Index (CPI)?

the average change over time in the prices of:consumer items .goods services

that people buy for day – to – day living.It combines economic theory with

sampling and other statistical techniques and uses data collected monthly to produce a timely measure of average price change.

Cont.

CPI provides an estimate of the price change between any two periods.

The CPI follows the prices of a sample of items in 12 main categories of consumer spending—such as food, clothing, shelter, and medical service.

Why is the C P I Important?

CPI calculation

Items Weight Base current CPI

Dura 0.982 4.84 11.03 2.24

Dura Fetarita 1.173 3.20 8.07 2.96

Yellow maize (Dura Shami) 0.069 4.12 9.29 0.15

Millet (Dukhn) 3.314 5.59 12.08 7.16

wheat 0.864 5.77 12.34 1.85

local barley 0.012 1.07 1.53 0.02

Imported barley 0.015 1.29 1.75 0.02

Egyptian rice ( Imported ) 0.608 2.11 4.80 1.39

∑ PnQo∑PoQo

Example

X100

Inflation rates

Month CPI 2008 CPI 2009 Inflation

January 106.0 118.0 11.2

February 106.6 118.4 11.1

March 106.6 118.2 10.9

April 109.6 119.0 8.5

May 110.7 120.5 8.9

June 115.8 127.2 9.9

July 119.4 131.2 9.8

August 122.5 135.3 10.4

September 121.0 136.6 12.9

October 118.6 133.9 12.9

November 117.8 134.9 14.5

December 116.9 132.7 13.4

Why Update the C P I?

Updating the CPI basket items, and their weights; represents the current consumption patterns made by Sudanese households.

The item’s weight is the share of total household expenditure on the item to total households’ expenditure on all items.

Cont.

Used as deflator for GDP in Services Sectors for example : Education , Health …ect.

change the base year according to the GDP year using the formula :

GDP Current yearChanged CPI

CPI basket

The last update of the Sudanese CPI basket items was in 2007 based on the HBS that conducted in 2007. The previous basket of the CPI was based on 1978.

Weights

reflects contribution to total expenditures of households.

determines the impact that its price change will have on the overall index.

CPI CalculationLaspeyres formula is used for the calculation.CPI basket consists of 663 items and the consumer

basket consists of 944 items. cut of 0.005 temporarily missing and seasonal items are treated

by distributing their weights at the other items in the same expenditure group.

Prices for fruits, vegetables, fresh meat, and fish food are collected on a weekly basis .other items are collected once a month.

The base year is 2007 for all the 15 northern states. CPI is compiled for each state and for Sudan at the

levels: state/ urban, state/ rural, and state.

CPI STRUCTUREStep1: Data/ Prices entry process -

geographic areas and geographic weights.

∑ PnQo∑PoQo

*100

Cont.

Step2: Calculation of relative prices and new weights, by dividing the current price by base year price. In addition, the new weight is calculated by multiplying the relative price by the base year weight .

Step3: To compute the minor group level, new weights for sub-minor groups within the minor group are aggregated and divided by the base year weights . The same procedures are done to calculate the Index at the major group level and finally for the general Index.

CLASSIFICATION SYSTEMCOICOP

Sudan

Used as deflator for GDP in Services Sectors for example : Education , Health …ect.

change the base year according to the GDP year using the formula :

GDP Current yearChanged CPI

X 100

COICOP Code - Expenditure groupConsumption Group Sudan/

UrbSudan/

RurSudan

Total 100.0 100.0 100.0

01 - Food and non-alcoholic beverages 43.4 62.0 52.9

01.1 - Food 41.3 59.0 50.3

01.1.1 - Bread and cereals (ND) 8.6 13.3 11.0

01.1.2 - Meat (ND) 9.8 13.8 11.8

01.1.3 - Fish and seafood (ND) 0.8 0.4 0.6

01.1.4 - Milk, cheese and eggs (ND) 4.8 4.8 4.8

01.1.5 - Oils and fats (ND) 2.3 3.6 3.0

01.1.6 - Fruit (ND) 3.3 4.3 3.8

01.1.7 - Vegetables (ND) 6.8 11.9 9.4

01.1.8 - Sugar, jam, honey, chocolate and confectionery (ND) 3.6 4.8 4.2

01.1.9 - Food products n.e.c. (ND) 1.4 2.0 1.7

01.2 - Non-alcoholic beverages 2.1 3.0 2.5

01.2.2 - Mineral waters, soft drinks, fruit and vegetable juices (ND) 0.9 1.0 0.9

CPI weights for the main groups and minor groups for food

Consumption Group Sudan/ Urb

Sudan/ Rur

Sudan

03 - Clothing and footwear 4.2 4.9 4.5

04 - Housing, water, electricity, gas and other fuels 18.3 10.2 14.2

05 - Furnishings, household equipment and routine household maintenance 8.3 5.5 6.9

06 - Health 1.1 0.9 1.0

07 - Transport 9.8 6.9 8.3

08 - Communication 2.3 1.1 1.7

09 - Recreation and culture 2.7 1.8 2.2

10 - Education 3.5 2.0 2.7

12 - Miscellaneous goods and services 3.1 2.2 2.6

CPI weights for the main groups Khartoumold Weight

Code Description

M

Weight

10000 Total Food,Drink & Tobacco 0.6378

20000 Total Clothing,Shoes 0.0281

30000 Total Rent And Fuels 0.1057

40000 Total Household Opern 0.0368

50000 Total Health Care 0.0090

60000 Total Transport,Etc 0.0601

72000 Total Entertainment 0.0172

74000 Total Education 0.0146

80000 Total Miscellaneous 0.0907

000 Total Weight 1.0000

Consumer Price Indices 2008 -2009

100.00

105.00

110.00

115.00

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125.00

130.00

135.00

140.00

cpi

Monthly Inflation Rates for Northern States 2008-2009

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Jan-09

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