More than 20 years after the last basket of goods and services was created to determine changes in price levels, the Statistical Institute of Jamaica (Statin) has launched a new basket. But the figures showed that inflation for the first six months of 2007 was 75 per cent higher than reported using the old basket.

The new data showed that the movement in the consumer price index (CPI), which is compiled from a specific basket of goods and services purchased by the population to measure changes in the general level of prices, for 'All Jamaica' was 5.1 per cent for January to June 2007 and not the 2.9 per cent reported using the older basket.

The Greater Kingston Metropolitan Area (GKMA), which covers Kingston, St Andrew, Spanish Town and Portmore, felt the brunt of the price increases - eight per cent compared to the 3.2 per cent reported in the old CPI.

Other urban centres, which include parish capitals not in the GKMA and 32 other urban centres across the country, saw price levels rise by 5.2 per cent rather than the 3.1 per cent previously reported for the period, while rural areas experienced 4.7 per cent inflation compared to 2.3 per cent.

When looking back at how the old and new indices compared there were similar movements in prices. The new CPI showed 5.7 per cent inflation in 2006 - lower than the 5.8 per cent reported for last year - and 12.6 per cent inflation in 2005 when Statin reported a figure of 12.9 per cent.

Using the new All Jamaica basket, the single largest increases faced by consumers were rentals for housing which increased by 14 per cent over 2006 - the bulk being felt in the GKMA where rentals went up by 16.8 per cent over the year.
Furniture and furnishings followed with a 12.5 per cent increase in price levels and then meat, fish and seafood, which increased by 10.9 per cent last year.

The household expenditure survey (HES), which was fielded between June 2004 and March 2005, formed the basis of the revision of the consumption pattern for the CPI. The last one was based on a 1984 survey, which would not have taken into account higher percentages of consumers' expenditure being spent on specific items, such as mobile phones and automobiles.

Since then, the government opened up import lanes for used cars by eliminating the quota system and restructuring tariffs, leading to an explosion of automotive purchases, while the telecommunications sector was liberalised in 2000.

As a result the basket, which contains 12 commodity groups, was reweighted to show higher spending on transport - 12.8, up from 6.2 - and communication which increased as a percentage of total household expenditure from from 0.5 per cent to four per cent.

Food and non-alcoholic beverages were also affected, dropping from the 45.9 per cent proportion it once held to 37.4 per cent.
Housing, water, electricity, gas and other fuels now have a weighting of 12.8 up from 10.2.

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