Radar | Apr 16,2022
The Central Statistical Agency (CSA) has revised the Consumer Price Index (CPI) for a basket of goods and services, prices set as the basis for inflation rate measurements.
The update was made on the major weighted index - major indicators - replacing a base year that is used for comparison in the measure of the economic index. The new base year replaced the one that was in use for the past eight years.
The Agency conducts the Consumption & Expenditure Survey every five years throughout the country in order to obtain the base year weight that identifies the expenditure weights of major household goods and services. The last assessment was done in 2016, but not used until last month.
The Agency has been using a rate adopted in 2011, which is too old and outdated, according to Alemayehu Teferi, director of Household Studies & Cost Statistics at the Agency.
“The 2011 base year doesn’t show the current market price,” Alemayehu told Fortune. “The newly selected base year is more diversified, up-to-date and includes additional goods that were excluded before.”
The new change has led the Agency to amend the inflation rate it reported in November. The initial report shows that the headline inflation was 10.6pc, which was later revised to 9.3pc with the new base year, spanning a 1.3pc difference.
“The change of base year creates weight discrepancies,” said Alemayehu.
One economist applauds the revision and he asserts that the discrepancy is understandable.
“The 1.3pc discrepancy is expected,” said Ali Yibrie (PhD), a lecturer at Bahir Dar University College of Business & Economics.
Ali also recommends the government take measures to lower the inflationary pressures and to keep it in single digits.
“The rate should be under control to stabilise the economy,” he said.
The first report with the new baseline shows that the inflation rate for December was 10.4pc, one percentage point higher than the previous month.
December’s consumer price index, a measurement of the average change in the price paid by consumers for a fixed basket of goods and services, shows that food inflation reached 11.4pc in December, while non-food inflation was recorded at 9.1pc, a respective two and 0.1 percentage point increase compared to November.
“Since December is a festive period,” reads the report, “prices usually rise differently from other periods.”
From food items, price for vegetables, meat, milk, cheese, eggs, butter, and spices showed an increase. Prices rose for non-food items such as clothing, footwear, housing repair and maintenance, energy, household goods and furnishings, transport, health care and food and drinks contributed as well to the growth of headline inflation.
December’s inflationary pressure was higher than neighbouring Kenya that had a single digit headline inflation rate of 5.7pc in the same period.
However, the Agency estimates that this month’s inflation rate would remain in single digits at nine percent. The officials mention the current Meherharvest season when the supply of food items will be high as a reason for the decline.
“We expect the price of food items and other goods to remain constant,” Alemayehu told Fortune.
PUBLISHED ON
Jan 26,2019 [ VOL
19 , NO
978]
Radar | Apr 16,2022
Fortune News | Jul 18,2020
Fortune News | Apr 26,2019
Fortune News | Oct 11,2020
Fortune News | Dec 25,2021
Dec 22 , 2024 . By TIZITA SHEWAFERAW
Charged with transforming colossal state-owned enterprises into modern and competitiv...
Aug 18 , 2024 . By AKSAH ITALO
Although predictable Yonas Zerihun's job in the ride-hailing service is not immune to...
Jul 28 , 2024 . By TIZITA SHEWAFERAW
Unhabitual, perhaps too many, Samuel Gebreyohannes, 38, used to occasionally enjoy a couple of beers at breakfast. However, he recently swit...
Jul 13 , 2024 . By AKSAH ITALO
Investors who rely on tractors, trucks, and field vehicles for commuting, transporting commodities, and f...
Apr 20 , 2025
Mufariat Kamil, the minister of Labour & Skills, recently told Parliament that he...
Apr 13 , 2025
The federal government will soon require one year of national service from university...
Apr 6 , 2025
Last week, the International Finance Corporation (IFC), part of the World Bank Group...
Mar 30 , 2025
When the private satellite channel, Ethiopian Broadcasting Service (EBS), aired an em...
Loading your updates...