The Consumer Price Index is a weighted average of the proportionate changes in the prices of a specified set or ‘basket’ of consumer goods and services between two periods of time. The CPI monitors the prices of a fixed basket of goods and services in 15 areas (locale) in Trinidad and Tobago. Monthly price surveys are conducted in groceries, shops and local markets for food and petroleum items. Price are collected quarterly for other items that are not as variable.


The data from the Household Budget Survey (HBS) was used to determine:

which items were selected for the basket of items monitored by the CPI;

the weights of these items i.e. their relative importance compared with all other items in the basket and,

the weights of the areas monitored by the CPI

Components and Weights

Changes in the CPI can be used to assess price changes associated with the cost-of-living. The CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.




Data Highlights for January 2024


SECTION INDICES

FOOD AND NON-ALCOHOLIC BEVERAGES

The Index for Food and Non-Alcoholic Beverages increased from 147.3 in December 2023 to 147.4 in January 2024, reflecting an increase of 0.1%. Contributing significantly to this increase was the general upward movement in the prices of fresh whole chicken, soya bean oil, tomatoes, fresh carite, eddoes, brown sugar, full cream powdered milk, fresh king fish, ripe bananas and full cream milk.

However, the full impact of these price increases were offset by the general decrease in the prices of celery, oranges, cabbage, parboiled rice, cucumber, pumpkin, mixed fresh seasoning, chive, eggs and Irish potatoes.

Price changes in this section for the month of January 2024 accounted for a net overall decrease of 0.1 points in the All Items Index.

OTHER SECTIONS

A further review of the data for January 2024 compared with December 2023 reflected a decrease in the sub-indices for Alcoholic Beverages and Tobacco of 0.2%, Housing, Water, Electricity, Gas and Other Fuels of 0.6%, Home Ownership of 0.7%, Furnishings, Household Equipment and Routine Maintenance of the House of 2.0%, Transport of 0.3% and Recreation and Culture of 0.4%.  Also, this period showed an increase in the sub-indices for Clothing and Footwear of 1%, Rent of 0.2%, Health of 1.2%, Communication of 3%, Hotels, Cafes and Restaurants of 0.9% and Miscellaneous Goods and Services of 0.3%. All other sections remained unchanged.

Changes in consumer prices in January 2024 compared with those of January 2023 reflected in various sections of the Index are shown hereunder:

Percentage (%) Change in Consumer Prices in January 2024 compared to January 2023

Section % Change
All Items 0.3
Food and Non-Alcoholic Beverages -1.9
Alcoholic Beverages and Tobacco 5.1
Clothing and Footwear -3.1
Housing, Water, Electricity, Gas & Other Fuels -1.1
Home Ownership -1.6
Rent 1.4
Water, Electricity, Gas & Other Fuels 0.0
Furnishings, Household equipment and routine maintenance of the house -1.6
Health 7.9
Transport 0.6
Communication 7.0
Recreation and Culture 3.2
Education 0.0
Hotels, Cafés and Restaurants 4.5
Miscellaneous Goods and Services 2.1
Source: Central Statistical Office


Index

Index number in statistics is the measurement of change in a variable or variables across a determined period.

Base period

The base period refers to the reference period (month) in which the index number series begins to be calculated. It is therefore the period in which the index is set to 100.0.

Weights

The weights reflect the relative importance of the goods and services as measured by their shares in the total items in the basket.


Consumer Prices Data Tables

Inflation Rate (%)

The Rate of Inflation as calculated by the Central Statistical Office (Trinidad and Tobago), is measured by the percentage change in the All Items Index (CPI) for the current month, January 2024, over the same month of the preceding year, January 2023 (Y O Y).

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2015 7.6% 6.8% 6.4% 6.3% 6.0% 6.0% 5.9% 5.6% 5.6% 5.3% 5.0% 4.6%
2016 2.4% 2.9% 3.0% 3.1% 3.2% 3.3% 3.2% 3.2% 3.1% 3.2% 3.1% 3.1%
2017 3.6% 3.1% 3.0% 2.7% 2.5% 2.3% 2.2% 2.1% 2.0% 1.9% 1.9% 1.9%
2018 0.8% 0.9% 0.8% 0.9% 0.9% 0.9% 0.9% 1.0% 1.0% 1.0% 1.0% 0.9%
2019 1.4% 1.3% 1.4% 1.3% 1.2% 1.2% 1.2% 1.2% 1.2% 1.1% 1.0% 1.0%
2020 0.4% 0.4% 0.4% 0.5% 0.6% 0.6% 0.6% 0.5% 0.5% 0.6% 0.6% 0.6%
2021 0.9% 0.9% 0.9% 0.9% 1.0% 1.1% 1.3% 1.4% 1.6% 1.7% 1.9% 2.0%
2022 3.8% 4.0% 4.0% 4.3% 4.4% 4.5% 4.7% 4.9% 5.1% 5.3% 5.6% 5.8%
2023 8.3% 8.0% 7.8% 7.3% 7.0% 6.8% 6.4% 6.2% 5.8% 5.4% 5.0% 4.7%
2024 0.3%

Keywords: consumer price index, inflation rate, CPI, consumer prices

Metadata

Methodology and Usefulness
Concepts and Definitions

The Consumer Price Index (CPI) is a weighted average of the proportionate changes in the prices of a specified set or ‘basket’ of consumer goods and services between two periods of time. It should be noted that the Index is not strictly a measure of general inflation, since it excludes non-consumer prices. However, consumer expenditure constitutes a large proportion of total final expenditure and thus the Index can be assumed to measure general inflation.

It is also important to note that the Consumer Price Index is not a Cost of Living Index, since the calculation of the Consumer Price Index does not involve changing the basket of goods as consumer preferences change (as required in the calculation of a Cost of Living Index). However, the Consumer Price Index will approximate a Cost of Living Index initially, but this approximation will become less precise with time.

Scope
Scope of data
Geographic Coverage

The Index is representative of the whole of Trinidad and Tobago as prices are collected across fifteen (15) areas.

Expenditure within geographic location

Area weights are based on expenditure within the geographic location and not on the expenditure by residents. Therefore, the prices collected within each area represent the prices charged within the area.

All Income Groups

The Consumer Price Index covers all income groups thereby ensuring:

(i) that the Index measures inflation for Trinidad and Tobago and not a subset of its population;

(ii) its suitability as a macro-economic variable to be used in macroeconomic planning;

(iii) the widest possible applicability for general indexation purposes such as escalating employee incomes or updating court awards; and

(iv) consistency of scope of the price data for use in constructing separate price indices for deflation in national accounting measures.

Acquisition Concept

The Consumer Price Index is based on the acquisition concept whereby goods and services are assumed to be acquired at the moment ownership of the good is transferred or the service is provided and the consumer incurs a liability to pay. Thus, goods and services that could potentially be included within the scope of the Consumer Price Index are as follows:

(i). Goods and services acquired at the consumer’s expense.

(ii). Goods and services acquired as remuneration in kind for work already done.

(iii). Goods and services received as gifts or transfers.

(iv). Goods and services produced and consumed by the same household.

Exception to coverage

The Index is generally not concerned with non-monetary expenditures because only monetary expenditures generate monetary prices that can be observed and recorded, and the measurement of inflation is concerned with changes in monetary prices. Thus, goods and services received as remuneration in kind, and gifts or other transfers are excluded from the Index. In addition gifts or other transfers to consumers incur no expenditure on the part of the consumer and therefore will be assigned a weight of zero, thereby making its inclusion in the Index unnecessary.

However, by international convention and also by recognition of the fact that one of the main uses of the Index will be to estimate a cost of living index, non-monetary expenditure on services produced and consumed by owner occupiers of dwellings are included within the scope of the Index since they have a significant impact on consumers welfare and standard of living. It is therefore necessary to impute a value for such non-monetary expenditures.

It should also be noted that, like dwellings, household or consumer durables such as refrigerators, washing machines etc., included in the Index, produce a flow of services which are inputs into other goods and services (outputs), which are then used to satisfy personal wants and needs of households. In such cases, the market value of the output should be imputed. Owing, however, to the practical and conceptual difficulties associated with such imputations, and the desire to measure actual prices, as determined by the market, the acquisition cost of these inputs are measured, that is, these durables are treated as final consumer goods.

Expenditures on items, which are not consumer goods and services (investment expenditure), are excluded from the Index. Thus, the following items are considered investment items or items of saving leading to the creation of financial assets and are excluded from the Index:

(i). Dwellings (The acquisition cost of dwellings is excluded. However, an imputed expenditure on household services derived from the use of the owner occupied dwelling is included.), land;

(ii). Mortgage payments;

(iii). Bonds, shares and other financial assets;

(iv). Health insurance premiums, pension contributions and the premiums paid for life insurance polices, most of which are savings, which in turn lead to the creation of new financial assets (investment). No estimate is made for any service charge element of premiums or contributions, which does represent consumption expenditure.

Transfers are unilateral payments, which do not result in the consumer acquiring any good, or service in return, that is, there are no counterparts. The following items incur payments, which are in the nature of transfers and are therefore excluded from the Index.

(i). Payments directly related to the ownership of assets such as income tax, and property rates and taxes. WASA rates can, however, be included since there is the provision of water in exchange for the payment.

(ii). National Insurance Contributions (NIS) and any other social security contributions.

(iii). Licenses for owning or using motor vehicles, such licenses being deemed direct taxes. However, licenses or fees for driving permits are by international convention included in the Index.

(iv). Subscriptions, donations and gifts. However, club fees or subscriptions to organizations that provide some service in return are included.

(v). Non-compulsory tips. However, compulsory service charges included in, for example, a restaurant bill for meals are included.

Unrecorded Activity

Owing to the exclusion of data on illegal goods and services from the Household Budget Survey, and the practical problems associated with obtaining price data for such items, illegal goods and services are excluded from the Index.

Classification/Sectorization

The Consumer Price Index is published under the following headings based on COICOP 1999:
All Items
01 Food and; Non-Alcoholic Beverages
02 Alcoholic Beverages  and Tobacco
03 Clothing and Footwear
04 Total Housing, Water, Electricity, Gas and Other Fuels
04.1 Home Ownership (Imputed Rents)
04.2 Rent
04.3 Water, Electricity, Gas and Other Fuels
05 Furnishings, Household Equipment and Routine Maintenance of the House
06 Health
07 Transport
08 Communication
09 Recreation and Culture
10 Education
11 Hotels, Cafes and Restaurants
12 Miscellaneous Goods and Services

Valuation/Basis of Recording

Prices recorded for the Consumer Price Index are the actual prices paid by consumers and therefore include indirect taxes, such as VAT. Prices recorded are also net of any discounts offered provided that:

(i). the discounts are available to all consumers;

(ii). the discounts are unconditional, that is, the discounts are not restricted to bulk purchases, cash or prompt payments etc; and

(iii). the quality of the good or service has remain unchanged

Source of Data

Source data collection programs

The Household Budget Survey (2008/2009) is the main source of data for the revised Consumer Price Index (Base year: January 2015 = 100). Data from this survey were used to construct a current basket of goods and services for pricing. Item weights for this basket of goods and services were derived from the relative share of expenditure by households on each item, to the total expenditure by households on all items, as captured in the Household Budget Survey (2008/2009).

Monthly price surveys are conducted in groceries, shops and local markets for food and petroleum items. Price are collected quarterly for other items that are not as variable.

Statistical Techniques

The initial sample size was 7,680 households; however, data was compiled for 7 090 responding households. Details on the methodology and sample design of the HBS can be found in: “The Household Budget Survey 2008/2009 Report volume I”.
The Consumer Price Index was re-based from January 2003 to January 2015.
At the elementary level, indexes are calculated using geometric averages of prices. The formula used to aggregate the various elementary indexes to compute the All-Items Index (the aggregation formula) is referred to as the Modified Laspeyres formula. The short-term price relatives for the elementary indices are used to move forward the higher-level indices from the previous period.
Temporarily missing prices are imputed for the price of missing observations by using the short-term price change of other varieties within the elementary aggregate. When a price has been missing for three consecutive periods, the data collector is instructed to find a substitute. Imputed prices are used in the calculation of the next period’s index.

Periodicity and Timeliness

Periodicity

Data is disseminated on a monthly basis.

Timeliness

Data is disseminated about two (2) months following the end of a reference period. In the event of this day being a public holiday or weekend, data will be disseminated on the next working day.

Consistency

Users of the Consumer Price Index may use the GDP deflator and/or the Index of producers’ prices in assessing the quality of the data produced in the Consumer Price Index and in attempting any comparisons or reconciliations of this data, as trends in both the GDP Deflator and the index of producers’ prices tend to map those found in the consumer price index.


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