AMONG ALL the official statistics of Pakistan, consumer price indicators (CPI) are the most sensitive tools for measuring changes in price levels. Their values are also used to find the inflation rates.
They give the level of prices paid by consumers for a specific basket of goods and services. Pakistan is constructing CPI since its inception.
With the passage of time, habits, choices, liking and needs prompt consumers to switch to new items. Changing times also herald the level of income. Hence the basket used to construct CPI needs to be revised. Pakistan uses a fixed basket of goods and services for an approximate period of 11 years. Boldwin (1990) has advocated to use “seasonal basket” within a year for construction of consumer price indexes. An index number with a base too far from current period looses it significance. Therefore, base year is revised as the time passes. Recently, FBS has revised the current base from 90-91 to 2000-01 (Larik 2002).
In the present paper we wish to discuss the behaviour of official CPI constructed in Pakistan for the last 31 years (1970-2001).
Material and methods: For the present discussion, we have obtained combined CPI for all income groups, all types of employees, and have included all urban areas. These CPIs are termed by FEBS as “general—combined”. From the various publications of FBS, (bulletins, year books, monthly and yearly consumer price index numbers and social indicators etc.), we have obtained 4 series of CPIs: base year 69-70-(A); base year 75-76 (B); base year 80-81 (C) and base year 90-91 (D); Almost every series continued for approximately 11 years except series A, which continued for 14 years. Below we give a very brief discussion on these four series.
1969-70 base: CPI with 69-70=100 covered a period of 14 years and ended at 1982-83=416.47. The number of urban areas considered in this index number were 12 with 266 items in the basket. The income groups considered were upto Rs 300, 301-500; 501-1000 and above Rs1000. The change in 11 years period in this series comes out to be 211-83 (from 100 to 311.83).
1975-76 base: For 75-76=100 round of CPI which ended at 1985-86=224.20, twelve urban centres were considered with 357 kitchen items for the basket. The income groups included for the construction of CPI were upto Rs600; 601-1500; 1501-2500 and above Rs2500. The total change in 11 years time come out to be 124.21.
1980-81 base: This series of CPI with 1980-81=100 calculated for 12 major urban areas, 466 consumer goods and services were included in the basket. The values from 1980-81=100, rose to 199.78 for 1990-91. The income group classification used in this series is upto Rs 1000; 1001- 2501-4500 and Rs4500 and above. The overall change thus comes to be 99.78.
1990-91 base: This series starting with 100 for 1990-91, ended in 2000-2001 with CPI as 233.24. For this series, a family expenditure survey was conducted in 1989-90 for obtaining weights. In this series of index number 460 items basket of good and services was taken for 25 urban cities.
Classification of type of employees remained the same with income groups as upto Rs1500; 1501-4000; 4001-7000; 7001-10,000 and Rs10,001 and over. The overall change observed was 133.24.
2000-2001 base: The new series with 2000-2001 as base, a new basket of 375 goods and services has been taken. The family expenditure survey was conducted in 52 urban cities with 40806 households in order to obtain weights for the CPI. This series is yet to start. Along with this series earlier series would continue for few years.
Analysis: A cursory glance at all the four series shows a consistent growth pattern. However, the growth pattern of first series (A) is very sharp and shows a change of 211.83 points on a 11 year period scale, whereas other series had a change of 124.21; 99.78 and 133.24 points. The fourth series show a pattern of stability at the upper half period of the time, which seems to be consistent with other social indicators. Pakistan is stabilizing itself after 50 years of its creation.
