Business
Inflation figures should reflect price levels ‘felt by the masses’: CB Governor
‘Household income and expenditure survey was last conducted in 2019’
By Sanath Nanayakkare
When calculating inflation figures, what is most important is the actual price levels felt by the masses, and therefore, the Department of Census and Statistics (DCS) should follow an independent methodology when doing that, the Central Bank Governor Dr. Nandalal Weerasinghe said Wednesday.
He said so responding to a question from the media whether the Central Bank would suggest any changes to the method of inflation calculation.
“No, I think what is important is looking from the people’s side and seeing what the real price levels are. So, the DCS should follow an independent methodology that absorbs the price levels really felt by the people when purchasing the nominated basket of food,” he said.
Replying in Sinhala to a similar question he said,” Janathawata denena mila mattama mehidee wadaa wedagath.”
The Governor pointed out that the price of the essential food basket and the household incomes may change after a significant period, and accordingly, the household expenditure is also subject to change. Therefore, updating this critical data is important.
He said that although the price levels in the market have reduced or stabilized, not all the people’s incomes have risen and it will take some time for that to happen.
He attributed the wage increase disparity to many people still not feeling the impact of the current deflation.
“Some people’s incomes have risen and others’ have not.” he said.
The Governor mentioned that the price of vegetables has a bigger impact on the cost of food, but the monetary policy which takes many factors into consideration has little leeway in controlling such upside price risks.
The Department of Census and Statistics (DCS) of Sri Lanka conducts the Household Income and Expenditure Survey (HIES) to collect data on household expenditure. This survey is conducted every three years to measure living conditions and consumption patterns. And this survey was last conducted in 2019, according to DCS website.