We are all more or less familiar with the concept of inflation – rising prices that reduce our purchasing power. The consumer price index (CPI) is the most commonly used measure of consumer price inflation. It measures the average price change of goods and services purchased by households for consumption. So to know whether that cup of coffee really was cheaper before, take a look at the CPI.
The CPI has a direct effect on millions of households who have their salary, pension or housing rent adjusted based on movements in CPI. Many contracts that run over a longer period are typically also adjusted, or indexed, to the development of the CPI.
The CPI is one of the key indicators for monitoring economic development and for planning monetary and economic policy. It is used as a deflator in many economic time series to obtain real growth rates. For example, to express the gross domestic product (GDP) in real terms, the development of GDP needs to be adjusted for price changes by using the CPI and other price indices.
In addition to being an indispensable index for national economies as well as the world economy, the CPI will play a role in the monitoring of the Sustainable Development Goals (SDGs). Good quality CPIs will be required to compile some of the about 220 indicators selected to monitor progress in SDGs. These indicators include, for example, those on poverty and income, consumption and food prices.
Calculating high-quality CPIs relies on good data sources, the use of sound statistical methods and continuous adaptation to the ever-changing markets of consumer products. More than 100 statisticians from the UNECE region and beyond – including North and South America, Africa, the Middle East, Asia and the Pacific – will meet in Geneva on 2-4 May at the UNECE CPI Expert Group meeting to discuss how to improve price statistics. The experts will discuss ways of using new electronic data sources, such as Big Data and bar code data. This may improve the quality of statistics and help make the statistical production process more efficient. The programme of the meeting also includes discussions on how to produce CPI for specific population groups, house price indices, and other challenges in measuring the CPI.
The CPI Expert Group played a key role in the production of the current international recommendations for compiling CPIs, the CPI Manual, published in 2004. Since then, there have been improvements in methods and practices and the needs of the users of the statistics have evolved. To reflect these developments the experts will discuss updating the CPI Manual in order to provide clear and up to date recommendations to countries for producing high quality and internationally comparable CPIs.