- A spin on popular ‘Big Mac Index’ conceptualised by The Economist
- Tracks prices of common food items on a weekly basis that go into a rice packet
Sri Lanka yesterday saw the launch of its own localised food tracker ‘Bath Curry Indicator’ (BCI), a spin on the popular ‘Big Mac Index’ conceptualised by The Economist in 1986.
The BCI, designed by Colombo-based free market think-tank Advocata Institute, is aimed at tracking the retail prices of the goods that could be included in a packet of rice and curry.
The indicator, that is specific to Colombo at present, tracks on a weekly basis the prices of common food items that go into rice packets and provides an insight on the rate of change of the prices over time.
The Central Bank’s weekly economic indicators publication is used to feed the indicator. The retail prices used are from the Pettah Market, except where data is unavailable, in which case data from the Narahenpita Economic Centre are taken into account.
The items on the BCI are selected from the Household Income and Expenditure Survey (HIES) 2016.
Pointing out that the food prices are a fairly volatile indicator, Advocata stated the prices are not only dependent on the seasonal and weather patterns but are also affected by policies.
While the BCI is not a measure of inflation, it indicates the manner in which the cost of a specific basket of goods has moved over a short period, thus providing an insight on the impacts of certain policies, as they come into effect.
Furthermore, Advocata noted that although the Colombo Consumer Price Index (CCPI) is a comprehensive method of calculating inflation and is a useful indicator to help assess the country’s macroeconomic conditions, there are some shortcomings in the process.
The index does not necessarily measure consumer reactions and preferences that change relative to price changes, the think tank noted.