Report claims federal cabinet decides to do way with SPI
The federal cabinet has ordered officials to stop publishing a key price index in what appears to be an attempt to mask rising food inflation in the country.
The government has decided to stop the release of weekly Sensitive Price Index (SPI) data and will only publish monthly Consumer Price Index (CPI) data, Business Recorder reported on Tuesday citing well-informed sources in the Finance Division.
Experts have expressed concerns over the decision.
When contacted by SAMAA Digital, Pakistan Bureau of Statistics (PBS) officials refused to confirm the report saying they were not aware of any such development.
The decision was made without planning or a formal proposal, the Business Recorder report suggests.
Prime Minister Imran Khan had called the November 2 cabinet meeting to discuss inflation. The Finance Ministry briefed the cabinet on weekly SPI.
“On a query by members on the weekly SPI in India and Bangladesh, it was clarified that the two countries release only CPI on monthly basis. The members argued that Pakistan should also only release CPI on monthly basis, which was the practice prevalent internationally,” reported the newspaper.
“The Cabinet directed the Planning, Development & Special Initiatives Division to only release CPI on monthly basis, instead of weekly SPI, in line with the practice prevalent internationally,” it said.
SAMAA Digital contacted at least three PBS officials who said they were unaware of any such development. They directed the queries to SBP Director Prices Naseer Ahmed, who did not receive the call.
After the cabinet meeting on November 2, the PBS has released weekly SPI data on November 4.
Pakistan uses three indices to measure inflation and price movement in retail and wholesale markets.
Consumer Price Index (CPI) data is released monthly. It is the main measure of price changes at the retail level. CPI measures changes in the cost of buying a representative fixed basket of items and is generally accepted as a measure of inflation in the country, according to PBS.
CPI tells how much the cost of living has increased or decreased to price changes irrespective of changes in consumer behaviour or quality of goods.
Sensitive Price Indicator (SPI) is designed to assess the price movement of essential consumer items at short intervals. That’s why it is important to release this data on weekly basis. In Pakistan, the Federal Bureau of Statistics has released the data every week for the last many years.
The Wholesale Price Index (WPI) is designed to measure the change of price in the primary and wholesale markets.
Sensitive Price Index, as the name suggests, measures price change more sensitively. It shows that how things have become more expensive or cheaper in comparison to last week as well as last year. For example, the CPI data released on November 4, shows that vegetable ghee price has increased 2.86% in comparison to last week and 48.74% in comparison to last year.
Most importantly, SPI focuses on goods and services purchased by households while CPI is much broader and measures a lot more items. According to FBS, CPI measures 487 items “in the basket of goods and services, which represent the taste, habits and customs of the people.” On the other hand, SPI measures only 53 items that include wheat, flour, rice, various pulses, sugar, and other edible items, clothes and shoes, petroleum products, and gas and electricity. Prices for most, if not all, of these items, have increased recently.
Analyst Adnan Sami Sheikh says by stopping the release of SPI data the government would be able to avoid the weekly pressure it faces when the data on inflation is published. Speaking to SAMAA Digital he said analysts who calculate price movement using SBP data may have their work cut out for them.
Economist Ammar Khan expressed shock over the decision, calling it a “horrible idea”. He claimed the government was “ignoring data points … or concealing them.”
“Weekly inflation data has always been published in the country regardless of how bad, or good it is. Somehow it doesn’t serve interest of the incumbent to stick with a weekly frequency,” he said in a series of tweets.
GoP decides to stop publishing weekly inflation data (SPI) and just report monthly data. This is a horrible idea. To control inflation, they’re just ignoring data points now, or concealing them. This is a classic ostrich in sand approachhttps://t.co/MEfCoi2mTh
— Ammar Khan (@rogueonomist) November 9, 2021
Although a recent IMF outlook report claims that Pakistan does not face food inflation, SPI released in recent weeks have pointed exactly in that direction. By stopping to publish SPI data, the government may be able to mask food inflation, it is believed.
In an earlier attempt to gloss over data, the PTI government changed the base year for CPI calculation in August 2009. The FBS now uses 2015-16 as the base year for CPI.