Changing expenditure trends have forced at least one Caricom state to take a second look at their basket of goods and another to upgrade its own to reflect the changes in expenditure.
This newspaper’s efforts to solicit a comment from Guyana’s Chief Statistician Lennox Benjamin about whether the Bureau of Statistics planned to add more items to the basket of goods or to revise same, in the light of the new expenditures in households proved unsuccessful. Guyana’s inflation stands at 13.3%, based on the Urban Consumer Price Index (CPI) published in July, with food contributing 88% to the overall inflation.
The government and the Bureau had said that prices would stabilize and in September Minister of Finance Dr Ashni Singh and Benjamin had said that the movement in the price index up to that time did not mean that that trend would continue until the end of the year. The Bureau monitors nine categories of goods and services. This includes 238 items from food, fuel, transportation, footwear, tobacco products, medical and personal care, clothing, aggregates like stone and cement, housing, furniture, education, communication and recreational services, domestic gas and other miscellaneous goods and services.
On September 28 Jamaica launched a revised CPI series and the Gleaner reported that the basket of goods now contain 482 commodities instead of 231.
The revision comes in the light of significant changes in consumer expenditure patterns, tastes, preferences, income levels, advances in technology, growth in real income per capita and the introduction of new products, the paper said. The series is now based on a new system called the classification of individual consumption according to purpose (COICOP). This is used to group the items and provides a multiple state computation of the CPI.
With the COICOP, the subgroups have moved from eight to 12, with the newly added subgroups being communication, recreation and culture, education, and restaurants and hotels.
On Wednesday, the Federation of St Kitts and Nevis announced the signing of a Price Control Order as the first step by the government to deal with the cost of living issue, according to the island’s Communication Unit at the Office of the Prime Minister.
“The second approach will be to reduce the duty on certain items in the basket as we move to Phase IV of the Common External Tariff (CET) under the Caricom Trade agreement,” Minister of State for Information Senator Nigel Carty said.
In the announcement, Prime Minister Dr Denzil L Douglas said his St. Kitts-Nevis Labour government fully appreciates that economic growth tends go hand in hand with increased inflation. “We are therefore taking pre-emptive action to protect our people from excessive increases in the cost of living. We have identified a number of basic goods that exert considerable influence on the cost of living in our Federation and we are proposing to collaborate with the private sector to reduce the price of these goods through a combination of tax exemptions and reduced margins,” Douglas said.
He reiterated his government’s intention to introduce appropriate legislation to support this process where necessary and to strengthen the monitoring mechanism to ensure full compliance with the agreed prices or margins in respect of the specified goods.