PBS to implement CPI’s rebasing from FY19

ISLAMABAD: Pakistan Bureau of Statistics (PBS) completed the re-basing of consumer price index (CPI), and is awaiting an approval from a competent authority for its implementation, officials said.

Officials said the new base mechanism is likely to be implemented from the upcoming fiscal year of 2018/19.

So far, the base year 2007/08 is utilised to evaluate CPI, but the basket has become obsolete due to arrival of numerous new products in the market. After rebasing, the evaluation base year would be 2015/16, an official said.

Currently, much weightage is given to urban commodities as compared to the rural ones while evaluating the inflation.

The official said the new base would strike a balance between the commodities used in urban and rural areas.

“The PBS has to face questions raised by economists and researchers that the CPI has an urban bias,” he added. “For removing the bias there would now be a rural CPI, an urban CPI and an aggregate CPI.”

At present, the PBS measures prices of 487 items collected from 76 markets in 40 cities across Pakistan, which means that the CPI only represents the urban consumption basket.

Around 62 percent of Pakistan’s population lives in rural areas and national CPI should track urban consumption patterns to calculate inflation as well as price trends in rural economy.

Officials said the new base is formulated on the basis of industrial census and census of manufacturing industries (CMI).

The CMI collected data from fields and so far five meetings of technical committee have been conducted to formulate the data.

“Hopefully, the new base would be operational from the next fiscal year (2018-19),” the official said. So far, the country is still using base of 2007/08 to evaluate inflation, which was scheduled to be changed in 2015/16 and “thereafter every 10 years”.

However, the process of rebasing witnessed some delay, which the sources attributed to the population census, which has recently been concluded all across the county. “Due to the census, the process of rebasing has been delayed,” the official added.