Inflation Rate Calculation
Brady explained that the CSO calculates inflation quarterly using a representative basket of 722 items and said the figures are accurate. He outlined the weighting revisions, with a new index planned for a November 1989 base, and defended the CSO’s independence when Deasy asked whether another agency should set the criteria.
asked the Taoiseach the method by which the rate of inflation is calculated; and if he has satisfied himself that the resultant figures are accurate.
Comment on this
The rate of inflation is measured by the Consumer Price Index which is compiled in respect of mid-February, mid-May, mid-August and mid-November each year by the Central Statistics Office.
The index measures the quarterly change in the cost to the average Irish household of purchasing a fixed representative basket of consumer goods and services. A total of 722 different items are distinguished covering all categories of household expenditure—food, drink, tobacco, clothing, footwear, fuel and light, housing, durable and other goods, transport, services and related expenditure. The index is updated on a regular seven year cycle to ensure that it continues to be representative of household expenditure.
Comment on this
The question basically asks if the Minister is satisfied that the system is satisfactory, that it gives an accurate indication of the rate of inflation.
Comment on this
Yes. I might add that internationally it is recommended that consumer price index weights should be updated at least once every ten years, but in Ireland a steadily updated cycle is followed and we are quite satisfied that the results accruing from that are quite accurate.
Comment on this
The one that will be published later this year will have taken place in August 1988.
Comment on this
When will the new weighting resulting from the survey done in 1988 be incorporated in the new index?
Comment on this
There are over 722 different items included in the survey and they cover, as I mentioned, food, drink, tobacco, clothing, footwear, fuel and light etc.
Comment on this
Might it not be a better idea if some independent agency such as the Central Bank were to draw up the criteria for such a study rather than the CSO?
Comment on this
All surveys conducted by the CSO are independent. They are undertaken in a very independent way. Therefore, I cannot see that there would be any great difference if another body were doing it