Revision of the consumer basket
A regular revision of the CZSO consumer basket, involving a change in weights and some representative items, took place in January 2012. The new weighting scheme is based on the structure of household consumption in 2010. The weight of administered prices in the consumer basket has been increased slightly. Deregulated rent has been excluded from the definition of administered prices, while workplace and school food items have been included (see the table). Within net inflation, the weight of food has been decreased. The weight of adjusted inflation excluding fuels is slightly lower, with the decrease in the weight of goods (other tradables) outweighing the increase in the weight of services (other non-tradables).
Given the increase in the weights of items with usually higher inflation (administered prices and services prices), the change to the consumer basket represents a shift towards slightly higher reported inflation. The change in the basket added about 0.1 percentage point to the published figures for January to March 2012 compared to the forecast in Inflation Report I/2012, which was based on the original basket. The change to the consumer basket also led to a slight revision of the first-round effects of the VAT changes in 2012 and 2013. At 1.13 percentage points, the contribution of the increase in the reduced VAT rate from 10% to 14% to consumer price inflation was 0.07 percentage point higher than originally assumed. The new forecast expects that the unification of the two VAT rates at 17.5% in January 2013 will have a first-round effect on inflation of -0.29 percentage point. The earlier estimate, based on the original basket, was -0.22 percentage point.
Table (BOX) Weights of the main categories in the CZSO consumer basket
The weight of administered prices in the consumer basket has been increased
|Old basket||New basket||Difference|
|adjusted inflation excluding fuels||53.5||53.3||-0.2|
|other tradables excluding fuels||22.0||21.4||-0.6|