CPI basket expands in Cayman Islands
To reveal more in-depth information as regards what households in Cayman are spending their money on, the Cayman government has uses a new expanded basket of goods and services in the latest CPI (consumer price index).
On March 26, 2008, the new CPI basket was revealed by Financial Secretary Kenneth Jefferson to a Chamber of Commerce luncheon. Mr. Jefferson explained that the Economic and Statistics Office (ESO) had adopted 12 major categories (rather than the previous eight) to determinine household expenditure.
The old system, which has been implemented in 1994, was based on a household income and expenditure survey from 1991, while the new CPI basket is based on a household budget survey that was carried out by the Ministry of Health in 2007 as part of the National Assessment of Living Conditions.
It is worth mentioning that the Chamber and business community have been repeatedly expressing their concern over using the outdated cost-of-living basket, as businesses use CPI statistics for forecasting future average price levels and consumer expenditure.
The updated system is based on the more recent survey. Under new method, housing and utilities take up the largest weighting at 391 per 1,000 (almost 40%), which compares with the previous weighting of 311. Also, the new system adds 2 categories – miscellaneous goods and services, and recreation and culture, as well as splits transport and communications into 2 separate sections. According to Jefferson, the new system added new items such as mobile phones and Internet expenditure in communications that were not included into the 1994 basket.
It is also important that Jefferson denied that there had been any political interference in the work of the ESO and rejected a call by the president of the Chamber, James Tibbetts, that an independent statistics office, free of direct government control, is to be established.