2024 started with food price increases according to consumer price index

March 12, 2024

Year-on-Year Analysis

The All Items Index increased 7.3% for the twelve months ending January 2024, a larger increase to a 3.3% increase for the twelve months ending December 2024.

The index for Food and Non-Alcoholic Beverages represented 15.1% of the overall All Items Index increase.

The Food Index rose 5.4% and contributed 83.8% to the Food and Non-Alcoholic Beverages Index increase.

Eight of the nine food subcategories rose over the twelve months. The Index for Bread and Cereals while increasing 8.0% over the year had the largest contribution of 24.2% on Food inflation.

The change was primarily impacted by increases in the indexes for Bread and Other Cereals, Flour, and other Products.

The index for Fish and Seafood had the second largest impact on Food inflation.

The index rose 11.0% and contributed 22.5% to Food inflation.

The index for Vegetables and Food Products N.E.C combined contributed 25.6% of the Food index increase.

The Index for All Items Less Food and Energy rose 8.8%. The index for Communication increased by 26.7%.

This was affected by an increase in the average cost of cell phones and cell phone services. The index for Miscellaneous Goods and Services increased by 10.1% and the index for Restaurants and Hotels rose by 15.4%.

The Clothing and Footwear index increased by 5.4% over the same twelve-month period.

Month-to-Month Price Changes

The Monthly Consumer Price Index increased in January by 3.3% after increasing 0.2% the previous month.

The Food and Non-Alcoholic Beverages increased by 2.1% with the index for Food increasing by 2.4% over the month.

The Food category posted mixed results with eight of nine subcategories posting increases over the one month period.

The index for Milk, Cheese and Eggs increased by 3.4%. Other notable increases were Meat and Meat Products (+2.9%).

Both the indexes for Food Products N.E.C. and Fruit both increased by 1.6%.

The index for All Items Less Food and Energy rose 4.3% in January.

The increase was largely attributed to increases in the indexes for Communication (+11.2%), Restaurant and Hotels (6.1%), and Miscellaneous Goods and Services (+5.5%).

Methodology

What is the consumer price index (CPI) measuring and how is it done?

The All Items Consumer Price Index (CPI) is the main measure of what is commonly called inflation, or headline inflation.

It measures the change in prices, on average, from month to month, and from year to year of the goods and services bought by most households.

Prices are collected monthly and quarterly from supermarkets and other suppliers of goods and services.

The pattern of household expenditure on these goods and services is derived from a regular household budget (or expenditure) survey (HBS).

The prices and spending patterns (known as weights) are then combined to calculate the price indices for groups of goods and services and for the All Items index.

These indices are based on expenditure patterns in 2006.

The All Items (or overall) index, with all of its twelve (12) component indices, is published each month.

For a detailed account of the methodology used in calculating the CPI, please call the Statistics Division.

Copies of the CPI for Jan 2024 can be accessed on the Division’s official website www.statistics.gov.ag

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Technical Note on the Compilation of the January 2024 Consumer Price Index Date of Release: March 12, 2024

Background

On January 1, 2024, the Government of Antigua and Barbuda implemented revisions to the Antigua and Barbuda Sales Tax (ABST) Act adjusting the ABST rate from 15% to 17%. The adjustment in the ABST rate affected the purchase price of some goods and services bought by households in January.

The ABST price changes were not uniformly implemented across the various establishments, which affected the ability of the Statistics Division to collect prices that comprehensively reflected the price changes due to the revisions in the ABST Act.

The Consumer Price Index (CPI) is a statistical index of the changes in the general level of prices of a fixed basket of consumer goods and services purchased by private households. The index provides an estimate of the price change between any two periods.

This period is referred to the price reference period.

The Statistics Division collects prices during the first two weeks of each month, and this is price collection period.

However, some prices collected during this period did not include the additional two percent increase as establishments were still adjusting the shelves prices to reflect the ABST increase and other price changes due to the new policies.

On the 15 February the Inland Revenue Department issued a notice reminding the public and goods and services providers that the ABST rate has been increased to 17% effective January 1, 2024; and all prices on the shelves, menus and in advertisements must reflect the new pricing policy by February 29, 2024.

General Approach

The Statistics Division in the Ministry of Finance and Corporate Governance explored several options to address the issue and modify data collection and use imputation methods in keeping with international standards and best practices to ensure the quality of the Consumer Price Index. The options explored included the following:

To have price collectors return to establishments and collect prices outside of the normal reference period

Request establishments’ electronic pricing data and other administrative data to capture price changes due to the new policies.

Use various imputation methods for those items in which the ABST was not captured.

Consult with international experts and price statisticians to look at possible solutions.

After review of the situation, research of CPI manuals and compilation guidelines and discussions with international experts for possible solutions, a decision was made to publish the CPI with the prices collected during the Division’s reference period without imputation or additional adjustments. The Division could not identify all the items in the basket of goods and services from the various outlets where the new tax policies were not applied. Therefore, the January and February CPI will not fully reflect the increased ABST as some of the establishments have not fully implemented the tax increase on the prices displayed.

Conclusion

The January and February CPI are not the calculations of final prices of some items as outlined above. The Division expects the increased ABST to be fully implemented across the various establishments and service providers in March 2024. The Statistics Division is ensuring stakeholders of the quality of the CPI as it is compiled in accordance with best practices and international standards. We will continue to monitor the situation and will inform our data users of any methodological changes as we continue to provide high quality official statistics to our data users.

For additional information, please contact the Statistics Division at info.stats@ab,gov.ag

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