The Consumer Price Index (CPI) measures the rate of change over the time in the prices of consumer goods and services, purchased or otherwise acquired by households, which households use directly, or indirectly, to satisfy their own needs and wants. 1 The CPI is one of the highest profile statistics compiled by a national statistics office. It is used as a headline measure of inflation, for wage and contract escalation, and in the compilation of the national accounts. It is also used extensively in analysis of the state of the economy.
The Timor-Leste CPI is calculated as a weighted average of the percentage price changes for a specified set, or ‘‘basket’’, of consumer products, the weights reflecting their relative importance in household consumption as measured in the 2011 Household Income and Expenditure Survey. These consumer products and services are classified according to the Classification of Individual Consumption according to Purpose (COICOP) into ten Groups (see table below) and 44 expenditure classes.
Each group and expenditure class has its own weight or measure of relative importance in the consumption of Timorese households. Separate weights are constructed for Dili and all other Districts combined (“ex-Dili”).
The CPI was reviewed and re-weighted in the second half of 2012 and the new Series 2 CPI was introduced as from January 2013. The Series 2 CPI is a monthly index for Timor-Leste, with analytical indexes for Dili and ex-Dili also available each month. Two information papers were published about the review and they are accessible at the tab above. A Guide to the Timor-Leste CPI is also accessible at the tab above.
At the Group level, the weights for the Series 2 CPI as from December 2012 are as follows:
|TABLE: Group weights for Timor-Leste CPI as from December 2012||
|1.||Food and Non-Alcoholic Beverages||
|2.||Alcohol and Tobacco||
|3.||Clothing and Footwear||
|5.||Furnishings, Household Equipment and Routine Household Maintenance||
|9.||Recreation and Culture||
Each month the General Directorate of Statistics collects prices in the Dili District for all the CPI items, and for the important items in the other Districts. For more information about the Timor-Leste CPI, see the information papers and CPI Guide referred to above.