MEDIA RELEASE 27 January 2017
New basket and weights for the Consumer Price Index (CPI)
There are 412 products and services in the new CPI basket, an increase from 396, which now includes new products such as instant noodles, frozen pizzas and pies, and ready-mixed flour products. Stats SA announced the changes to the Consumer Price Index (CPI) weights and basket of goods and services today. The basket forms the basis from which the monthly CPI is calculated and the changes will take effect from the January 2017 CPI statistical release. This will ensure that the inflation measurement reflects changes in consumer expenditure since the last reweighting in 2013.
Levies for sectional title schemes, video games, diesel and driving lessons will also form part of the new CPI basket. Postage stamps, pre-recorded DVDs and public hospital services have fallen out of the basket.
The proportions of household spending determine the weights of the CPI. Each product has a weight which determines its relative importance in the calculation of overall inflation. Significant shifts in weights are seen in the food and non-alcoholic beverages (NAB) and transport categories. Food and NAB increased its weight to 17,24% from 15,41% in the 2012 set of weights. Meat and milk, cheese and eggs products increased their weight while that of bread and cereals dropped. The weight of the transport category dropped to 14,28% from 16,43% in 2012, mainly because of a decrease in the weight of fuel.
The four-yearly update is based on data gathered by Stats SA in the Living Conditions Survey (LCS), supplemented by a range of other data sources including Stats SA surveys and regulatory and industry reports.
All of the indices in the CPI will be rebased to 100 at December 2016. Rebasing ensures that the impact of new weights and products on inflation is not distorted by differences in index levels that have accumulated since the previous rebasing.
The full set of 2016 weights (P0141.5) and an information note detailing the changes to the basket and weights are available on the Stats SA website.
For technical enquiries contact:
Chief Director: Price Statistics
Tel.: 012 310 8290
Cell: 082 888 2248
Director: Media and Public Relations
Tel: 012 310 8578
Cell: 082 805 7088