Alcohol and tobacco products included in the basket
Sri Lanka’s inflation in the month of October measured by the new National Consumer Price Index (NCPI) was recorded at 3 percent, accelerating from 1.9 percent in September, the Department of Census and Statistics (DCS) said yesterday.
The DCS said the NCPI is compiled using prices collected from all the nine provinces.
The NCPI (base year 2013), is based on data from the Household Income and Expenditure Survey (HIES) conducted in 2012/13.
The DCS said the formation of the NCPI was driven by the need felt for an index that measures price changes for the entire country.
The Colombo Consumer Price Index (CCPI) only covers the urban areas of the Colombo District.
The DCS said the NCPI will better reflect international best practices and will act as a key indicator in reaching future fiscal and monetary policy decisions.
“The NCPI represents a major milestone in the development and improvement of macroeconomic data for Sri Lanka,” the DCS said.
For the NCPI, the prices are collected for each item in the market basket from three price collecting centres in each district town.
The items of the market basket are categorized into 12 major divisions as per the internationally recommended classification, of which alcoholic beverages, tobacco and narcotics and hotels and restaurants are two major divisions.
In compiling the CCPI, the alcoholic beverages, tobacco and narcotics division was not included and the restaurants and hotels division was included under the food category limiting the number of categories to 10. But under the NCPI, these two divisions were also included separately making the number of divisions to 12 as per the international recommendations.
The price indices are compiled for these 12 divisions separately and the NCPI is calculated as the weighted average of price indices of those 12 divisions.
The DCS said the NCPI would be released monthly commencing with a time lag of 21 days.
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