Changes to CPI give food more weight
Pay-TV, noodles, apartment living and lottery dreams have become part of South Africans’ way of life
Marmite is out and so are teapots and postage stamps. But frozen pizzas are now in, as are coffee mugs, soccer balls and video games; although tennis balls are out and so are board games. These are some of the changes in the list of items whose prices Statistics SA uses to measure consumer price inflation (CPI) each month. The changes in the basket of goods and services used in the consumer price index are part of the reweighting and rebasing exercise Stats SA conducts every four years. The outcome of the latest such exercise was announced on Friday, and while reweighting and rebasing might seem deeply dull and technical to most of us, it provides a fascinating window on South Africans’ changing spending habits. It also matters for the inflation rate and economists will be sharpening their models and updating their inflation forecasts in the light of Friday’s figures. That is especially so because food and fuel prices tend to be a big driver of inflation trends from month to month, ...
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