What’s inside South Africa’s inflation basket?

Tech items feature prominently in South Africa’s Consumer Price Index (CPI) basket, aimed to measure the change in consumer prices over time.

The CPI is a social and economic indicator constructed to measure changes in the general level of prices of consumer goods and services that households acquire, use, or pay for.

According to StatsSA, this is done by measuring the cost of purchasing a fixed basket of consumer goods and services of constant quality and similar characteristics, with the products in the basket being selected to be representative of households’ expenditure during a year or other specified period.

Such an index is called a fixed-basket price index.

The index also aims to measure the effects of price changes on the cost of achieving a constant standard of living.

The South African CPI has two equally important objectives:

  • To measure inflation in the economy so that macroeconomic policy is based on comprehensive and up-to-date price information and to provide a deflator of consumer expenditure in the expenditure national accounts.
  • To measure changes in the cost of living of South African households to ensure equity in the measures taken to adjust wages, grants, service agreements and contracts.

The BBC reported that changes in households’ use of digital technology was behind several changes to the basket in Britain in 2014. This included replacing DVD recorders with video streaming services like Netflix.

The Beeb also reported that digital single lens reflex cameras were also added, at the expense smaller compact digital cameras.

The basket of goods and services in the UK contains 699 items, while in SA that number is close to 400.

“We last implemented changes to the CPI basket in 2013.  Typically we update it every 4-5 years depending on when data on household spending patterns is available,” a spokesperson for Stats SA said.

Tech items in the basket include laptops and tablets; also internet subscription fees.  “Then you have items such as television, DStv decoder, cell- and landline- phones, telephone fees, camera, CDs and DVDs,” spokesperson said.

This is along with more expected items, like alcohol, tobacco, instant coffee, rice and bread.

Some of the more obscure items in the basket include funeral expenses, hair relaxer, rugby tickets, tennis balls and laxatives.

A full list of the items can be found on Stats SA.

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What’s inside South Africa’s inflation basket?