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inflation

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inflation and prices

inflation and prices

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    • 1. ﻢﻳﺣﺭﻠﺍ ﻥﻣﺣﺭﻠﺍ ﷲﺍ ﻢﺴﺑ -NOSSCIRE-
    • 2. USERS PRODUCERS WORKSHOP PRESENTATION ON PRICE STATISTICS BY WAQAS AHMED PRICE STATISTICS SECTION FBS, KARACHI -NOSSCIRE-
    • 3. PRICE STATISTICS
      • PRICE STATISTICS INCLUDES COLLECTION OF RETAIL AND WHOLE SALE PRICES AND COMPUTATION OF FOLLOWING INDICES:-
      • 1. CONSUMER PRICE INDEX (C.P.I)
      • 2. WHOLESALE PRICE INDEX (W.P.I)
      • 3. SENSITIVE PRICE INDICATOR (S.P.I)
      -NOSSCIRE-
    • 4. Consumer Price Index
      • “ Consumer Price Index is the main measure of price changes at the retail level. It measures changes in the cost of buying a representative fixed basket of goods and services and is generally accepted as a measure of inflation in the country”.
      -NOSSCIRE-
    • 5. SENSITIVE PRICE INDICATOR (SPI)
      • Sensitive Price Indicator (SPI) is designed to assess price movement of essential consumer items at short intervals (on weekly basis ).
      -NOSSCIRE-
    • 6. WHOLE SALE PRICE INDEX (WPI)   Wholesale price index ( WPI) is designed to measure the change of price in the primary and wholesale markets.   -NOSSCIRE-
    • 7. Why Three Types of Indices?
      • CPI measures Inflation rate in the country
      • SP I is computed to assess the price movement of essential commodities at short interval of time to review the price situation in the country.
      • WPI measures the General Price level in the whole sale market.
      -NOSSCIRE-
    • 8. WHAT CPI MEASURES?
      • It measures Price changes of fixed market basket of goods and services of constant quality and quantity.
      • It tells how much cost of living has risen or fallen due to price changes irrespective of changes in consumer behaviour or quality of goods.
      • It does not reflect the cost of living or in house hold consumption expenditure as such but only the influence of price fluctuation on the trend.
      -NOSSCIRE-
    • 9. Selection of Markets/Outlets and Cities
      • Items are selected on the basis of Family Budget Survey
      • Markets are selected through retail and wholesale trade survey.
      • Outlets are selected on transaction value basis.
      • Cities are selected on population basis
      • Stratified sampling are used for selection of cities.
      -NOSSCIRE-
    • 10. Weights for CPI
      • The results of Family Budget Survey provide the average percentage expenditure(Consumption pattern) of Households on each item/each commodity group and for each income group for the cities covered in CPI. These average percentage expenditures on item and commodity groups are called weights and are being used in computation of the CPI.
      • P o x q o
      • W i = ------------- x 100
      •  P o x q o
      • Example: 1. Total Expenditure: Rs. 3000,
      • 2. Expenditure on Wheat Flour:- Rs. 100
      • 3. % of Expenditure on Wheat flour = (100/3000)*100 = 3.33
      • Weight of Wheat flour = 3.33%
      -NOSSCIRE-
    • 11. Commodity Groups Wise Items and Weights C.P.I (2000-01)
      • Commodity Group Weights Items
      • 01. Food, Beverages & Tobacco 40.34 124
      • 02. Apparel, Textile & Footwear 6.10 42
      • 03. House Rent 23.43 01
      • 04. Fuel & Lightening 7.29 15
      • 05. House Hold, Furniture & Equipment etc. 3.29 44
      • 06. Transport & Communication 7.32 42
      • 07. Recreation & Entertainment 0.83 16
      • 08. Education 3.45 24
      • 09. Cleaning, Laundry & Personal Appearance 5.88 26
      • 10. Medicines/Medicare 2.07 29
      • TOTAL 100.00 374
      -NOSSCIRE-
    • 12. COVERAGE OF CITIES AND MARKETS IN BASE YEAR FOR CPI 2000-2001 -NOSSCIRE- Name of City No of Markets Name of City No of Markets Punjab 1. Islamabad (Federal Capital Area) * 04 10. Jhang 01 2. Rawalpindi * 06 11. Okara 01 3. Lahore * 07 12. D. G. Khan 01 4. Gujranwala * 01 13. Bahawalpur * 01 5. Faisalabad * 02 14. Bahawalnagar 01 6. Multan * 03 15. Mianwali 01 7. Jhelum 01 16. Vehari 01 8. Sialkot * 01 17. Attock 01 9. Sargodha * 01 18. Samundari 01 * Cities also included in SPI cities
    • 13. COVERAGE OF CITIES AND MARKETS IN BASE YEAR FOR CPI 2000-2001 -NOSSCIRE- Name of City No of Markets Name of City No of Markets Sindh N.W.F.P. 19. Karachi * 13 27. Peshawar * 03 20. Hyderabad * 04 28. Mardan 01 21. Sukkur * 02 29. Abbottabad 01 22. Nawabshah 01 30. D. I. Khan 01 23. Larkana * 01 31. Bannu * 01 24. Mirpurkhas 01 Balochistan 25. Shahdadpur 01 32. Quetta * 02 26. Kunri 01 33. Khuzdar * 01 34. Turbat 01 35. Loralai 01 Total Cities = 35 Total Markets = 71 * Cities also included in SPI cities
    • 14. INCOME GROUPS OF CPI
      • Up to Rs. 3000.00
      • Rs. 3001.00 - 5000.00
      • Rs. 5001.00 – 12000.00
      • Above Rs. 12000.00
      -NOSSCIRE-
    • 15. Time table for Collection of Prices -NOSSCIRE- Part-I Food, Beverages Tobacco Monthly 11-14 of each month Part-II Apparel, Textile and Foot Wear Fuel and Lighting Monthly 01-03 of each month Part-III House Hold, Furniture & Equipment Transport & Communication Monthly 04-06 of each month Part-IV Recreation, Entertainment & Education, Cleaning, Laundry & Personal Appearance & Medicines Monthly 07-10 of each month Part- VII WHOLE SALE PRICE Monthly 13-15 of each month Part-VI S.P.I Weekly Each Thursday Daily Prices of 18 items Daily Daily
    • 16. FORMULA USED FOR COMPUTATION OF CPI
      • Laspeyre's formula as given below is being used for the computation of CPI.
      •  (Pn/Po) x wi  
      • In = --------------------- x 100  
      •  wi  
      • Where In = CPI for the nth period  
      • Pn = price of an item in the in the nth period  
      • Po = price of an item in the base period  
      • wi = weight of the ith item in the base period = Po x qo /  Po x Qo  
      •  wi = Total weight of all items.  
      -NOSSCIRE-
    • 17. EXAMPLE FOR COMPUTATION OF CPI  ( P n /P o ) x W i Index = -------------------------------- x 100  W i     1.3246 I = -------------------------- x 100 = 123.41 1.0733   -NOSSCIRE- ITEM UNIT BASE PRICE (P o ) PRICE IN MAR, 06 (P n ) WEIGHT (W i ) P n / P o P o / P n x W i Moong Pulse Kg 29.91 47.61 0.2230 1.5918 0.3550 Mash Pulse Kg 45.01 52.72 0.2017 1.1713 0.2363 Masoor Pulse Kg 36.23 44.03 0.2214 1.2153 0.2691 Gram Pulse Kg 28.99 31.50 0.4272 1.0866 0.4642         1.0733   1.3246
    • 18. -NOSSCIRE-
    • 19. Limitation of CPI
      • Coverage is limited
      • Only covers Urban Centres
      • Prices may have different trend in rural & urban centres.
      • Rent is computed through construction input items index instead of rent survey.
      • It measures partially inflation not total consumer’s expenditure.
      -NOSSCIRE-
    • 20. WHOLE SALE PRICE INDEX (2000-01 )
      • Coverage:
      • Commodities: 106 Items 425 Price Quotations 1550
      • CITIES:- 18 Major Cities
      • 1. Lahore 2. Faisalabad 3. Rawalpindi 4. Multan 5. Gujranwala
      • 6. Sialkot 7. Sarghoda 8. Bahawalpur 9. Sahiwal 10. Karachi
      • 11. Hyderabad 12. Sukkur 13. Nawabshah 14. Larkana
      • 15. Peshawar 16. Quetta. 17. Mirpurkhas 18.Mingora
      • GROUPS & WEIGHTS:-
      • Commodity Group Weight No. of Items No. of Commodities No. of Price
      • Quotation
      • FOOD 42.12 106 43 693
      • RAW MATERIALS 7.99 25 09 104
      • FUEL, LIGHTING 19.29 17 11 36
      • & LUBRICANTS
      • MANUFACTURES 25.87 227 32 564
      • BUILDING
      • MATERIALS 4.73 50 11 153
      • TOTAL 100.00 425 106 1550
      • PERIODICITY OF PRICE COLLECTION: - 11 th to 14 th of Each Month (Monthly)
      -NOSSCIRE-
    • 21. WEIGHTS FOR WPI
      • The value of marketable surplus is being used for deriving weights of commodities/items included in WPI. The value of marketable surplus is the value of commodity available for sale in wholesale market. It is equal to the total value of production less consumption by the producers less exports (if any) plus imports.
      • Example:- Production – Self Consumption +Imports- Exports
      • Wheat = (100 )-(20) + (10) – (10) =80
      • Value of Marketing Surplus= 80 x 1000 = 80000
      • Total Value of all the Items included in WPI =100,0000
      • % of Wheat in Total Value = (80000/1000000) x 100 = 8%
      -NOSSCIRE-
    • 22. Whole Sale Price Index (WPI)Historical Changes   -NOSSCIRE- BASE YEAR No of Commodities 106 No of Price Quotations No. Of Cities Commodity groups 1959-60=100   64 201 22 Food Raw Materials Fuel,lighting & lubricants manufactures 1969-70=100   72 433 22 Food Raw Materials Fuel,lighting & lubricants manufactures 1975-76=100 87 625 22   Food Raw Materials Fuel,lighting & lubricants Manufactures Building Materials 1980-81=100 91 690 22 Food Raw Materials Fuel,lighting & lubricants Manufactures Building Materials 1990-91=100 96 1210 16 Food Raw Materials Fuel,lighting & lubricants Manufactures Building Materials 2000-01=100     1550 18 Food Raw Materials Fuel, Lighting& Lubricants Manufactures Building Materials
    • 23. SENSITIVE PRICE INDICATOR (2000-01=100 )
      • Coverage:
      • Items: 53
      • Markets: 53
      • Price quotations: 10812
      • CITIES:- 17 MAJOR CITIES
      • 1. Lahore 2. Faisalabad 3. Rawalpindi 4. Islamabad
      • 5. Multan 6. Gujranwala 7.Sialkot 8. Sargodha
      • 9. Bahawalpur 10. Karachi 11. Hyderabad 12. Sukkur
      • 13. Larkana 14. Peshawar 15. Bannu 16.Quetta
      • 17. Khuzdar.
      • INCOME GROUP: - UPTO Rs. 3000.00 (Also for other groups)
      • CATEGORY OF EMPLOYEES:- ALL CATEGORIES COMBINED
      • PERIODICITY OF PRICE COLLECTION: -
      • On Every Thursday (Weekly Basis)
      -NOSSCIRE-
    • 24. LIST OF ITEMS OF SPI -NOSSCIRE-
    • 25. Sensitive Price Indicator (SPI) Historical Changes     -NOSSCIRE- BASE YEAR NO OF CITIES NO OF ITEMS   NO OF MARKETS INCOME GROUP OCCUPATIONAL CATEGORIES 1969-70=100   12 28 22 upto Rs.300 Industrial employees Commercial employees Government employees 1975-76=100   12 38 22 Upto Rs.600 Industrial employees Commercial employees Government employees 1980-81=100 12 46 50   Upto Rs.1000 Industrial employees Commercial employees Government employees 1990-91=100 12 47 48 Upto Rs.1500 Industrial employees Commercial employees Government employees   2000-01=100 17 53 53 Upto Rs.3000 All categories combined including self employer and employeed.
    • 26. -NOSSCIRE-
    • 27. Dissemination of Price Data
      • WPI Intercity Prices of 18 cities.(Monthly/Yearly)
      • CPI Intercity Prices of 35 cities(Monthly/Yearly)
      • WPI indices for 5 commodity groups.
      • CPI indices for 10 commodity groups.
      • CPI indices, 4 income groups,10 commodity groups and 17 CPI cities.
      • Combined CPI indices for 10 commodity groups for 35 CPI cities.
      • Intercity prices of construction items.
      • SPI indices by income groups on monthly basis
      -NOSSCIRE-
    • 28. FUTURE PLANNING
      • Change of base of CPI, WPI & SPI from 2000-2001 to 2006-2007.
      • Rural areas will be covered in CPI.
      • Rent will be computed on rent survey basis.
      • COICOP classification will be used in CPI and CPC in WPI.
      • Enhance scope of indices in terms of cities/items and income groups.
      -NOSSCIRE-
    • 29. THANK YOU -NOSSCIRE-