ISLAMABAD, March 13: The rate of inflation (Consumer Price Index) increased by 2.83 per cent during the first eight months of the current financial year as compared to corresponding period of previous year.
Using 2000-01 as the base year for the first time, the Federal Bureau of Statistics, in its monthly review for February 2002, said the CPI moved up to 103.29 at the end of the period under report.
The same 8-month period had seen an increase of 4.84 per cent in 2000-01 and of 3.32 per cent in 1999-2000.
The Sensitive Price Indicator (SPI), which covers the impact on the lowest income people, went up by 3.49 per cent during the period July-February (2001-02). In February, the SPI rose to 105.08, with 2000-01 as the base year.
In July-February (2000-01), SPI had soared by 5.38 per cent, as compared to 1.66 per cent increase during the same period of 1999-2000.
The Wholesale Price Index (WPI), with 1990-91 still serving as the base year, increased by 2.22 per cent to 247.1 during the same period — denoting an upward swing of 147.1 per cent in the preceding 10 years.
During the same period in 2000-01, WPI had increased by 6.84 per cent as against 1.34 per cent rise during the comparable period of 1999-2000.
During February 2002, CPI increased by 3.29 per cent, SPI by 5.08 and WPI by 0.12 per cent over the same month last year. During the same month of 2000-01, the three indices had registered increases of 4.84 per cent, 5.56 per cent and 7.76 per cent, respectively, as compared to increases of 3.02 per cent, 0.37 per cent and 0.04 per cent, respectively, during February, 1999-2000.
When measured against January 2002, CPI went up by 0.34 per cent, while during February 2002, it had decreased by 0.08 per cent and 0.02 per cent, as compared to the preceding month.
Previously, the FBS used the year 1990-91 as the base year to indicate the increase or decrease in prices. From now on, 2000-01 will be the new base year for CPI and SPI, with 100 as the benchmark. Any figure above or below that number will denote the rise or fall of price indices as worked out by the Bureau on the basis of data collected from the market.
Nevertheless, the Bureau did not use the new benchmark for Wholesale Price Index (WPI) for February. When asked for the reason, the Director General of FBS, Dr Nur Mohammad Larik told Dawn that changing benchmark required a very complicated and laborious exercise.
He was, however, confident that the Bureau would be able to issue WPI for March based on 2000-01 as the base year.
While the switch-over to a new base year and benchmark may simplify the work the statisticians, from the point of view of policy makers as well as low-income groups,
it may camouflage the real behaviour of the prices of essential items. It may not provide any relief to the latter, but end up making the former complacent.
According to the FBS release, the WPI had increased by 147 per cent since 1990-91, whereas the incomes of low- and middle-income people remained almost static — a situation compounded by the drastic drop in purchasing power of the rupee. Paradoxically, there is no institution to scientifically prepare and report the indices of incomes of people belonging to different socio-economic strata.
Another area where the FBS has tried to improve the data with a view to reflecting the effect of price increases on low- and middle-income people is the addition of a group in the Consumer Price Index. Previously bunched with the group “Recreation, Entertainment & Education”, a new group “Education” has been added, raising the number of groups in CPI to 10.
Another meaningful change in the composition of CPI is the change-over from the group “medicine” to “medicare”. This may mean that henceforth the FBS would, besides only medicines, also monitor the entire gamut of expenditures incurred by the people to get rid of diseases.
In this connection, the FBS chief said that the composition of CPI was in conformity with international practice. Thus in other countries too, food was similarly bunched with beverages and tobacco. Thus the addition of a new group on education was a deviation which had been resorted to in view of the peculiar situation in Pakistan. Too many groups would complicate the statisticians’ task, he added.