Release Date: 26th August, 2016
The Consumers Price Index (CPI) is an indicator or measure of prices changes. It is a fixed weighted average of price relatives and is computed using the Laspeyres price index formula. The current weighting pattern is based on the 2005 Household Expenditure Survey (HES), which was carried out in 2005/06. The HES information was used to select the 'basket', which is the commonly used term for the goods and services prices for the purpose of compiling the CPI.
In the June 2016 quarter compared with the March 2016 quarter:
- The consumer price index (CPI) fell by 4.3 per cent
- Fuel prices and International travels fell by 8.3 per cent and 2.3 per cent consecutively making the largest downward contribution
- Footwear prices rose to 3.6 per cent
- Tobacco went up by 1.1 per cent
- The underlying CPI however has increased by 0.1 per cent indicating that most of the items driving the CPI down are those considered to be highly volatile, subject to significant seasonal fluctuations, or largely affected by policy decisions.
From the June 2015 quarter to the June 2016 quarter:
- The consumer price index (CPI) made minimal decrease of 0.99 per cent
- Underlying inflation increased by 2.0 per cent
The graph below shows changes in the major groups between March quarter 2016 to June quarter 2016.
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Information about CPI
The Consumer Price Index covers price changes of the basket of goods and services consumed by all households on Rarotonga (the main island).
The base year is 2006. Prices are collected for 205 items and from selected outlets around Rarotonga. Individual prices are combined using weights from the Household Expenditure Survey (HES) conducted in 2004/5. The HES information was used to select the basket of goods and services.
The inclusion of an underlying measure is a recent improvement and it is published at the same time as the CPI. The underlying measure excludes items of a highly volatile nature, items that are subject to policy changes.
It excludes all locally produced fruit, vegetables, meat and fish; international airfares; mortgage interest, government rent, postal and telecommunication charges, electricity charges; tobacco and alcohol; petrol and diesel.
The CPI is computed using the Laspeyres price index formula.