## cr18262

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---

### SUMMARY OF MISSION OUTCOMES AND PRIORITY RECOMMENDATIONS
- Mission: technical assistance mission during March 14–23, 2018 to assess methodological soundness of all price indexes compiled by Statistics Mauritius.
- Indexes assessed: producer price index on agriculture (PPI-A), producer price index on manufacturing (PPI-M), export and import price index (XPI and MPI), and the construction price index (CoPI).
- Discussed broadening PPI coverage to include services (SPPI) to improve national accounts deflators, especially for hotels, business services, education, and health.
- Reviewed CPI and status of Residential Property Price Index (RPPI) development since March 2017 mission.
- Rationale: reliable price statistics essential for economic policy, private sector decision making, foreign investors, government departments, public, and robust estimates of real GDP.
- Assessment of methodologies:
  - Methodologies employed by Statistics Mauritius are sound and largely in line with international guidelines and practices.
  - All price indexes use similar aggregation methodologies and the same index compilation system.
  - Dependency on a consultant to maintain the compilation system noted.
  - Recommendation: improve documentation and develop more internal system knowledge to reduce vulnerability.
- Coverage observations:
  - PPI-A, PPI-M, XPI and MPI cover all important industries (see Annex 1).
  - CoPI covers only residential properties.
  - CPI excludes costs of owner occupied housing except interest on home loans.
  - Recommendation: extend coverage of both CoPI and CPI; scope to develop SPPI and RPPI.
- Data collection context:
  - Statistics Mauritius conducting Census of Economic Activities 2018.
  - Phase 1: data collection from small establishments (less than 10 employees) has started.
  - Phase 2: data collection from large establishments (10 or more employees) will be conducted in 2019.
- Legal and institutional context:
  - Statistics Mauritius collects and disseminates statistics under the authority of the Statistics Act 2000, amended in 2011 and 2017.
  - Act provides legal framework for data collection, dissemination, data sharing, confidentiality, and user consultations.
  - Recommendation: improve application of the Statistics Act to acquire business survey data and administrative data from government departments and private corporations.
  - Recommendation: engage Bank of Mauritius in data sharing through annual senior management meetings, quarterly management meetings, and ongoing working level interactions.

- Priority recommendations (selected targets):
  - Target Date: June 2018 — Implement the roadmap for RPPI development set in March 2017. Responsible: Statistics Mauritius.
  - Target Date: June 2018 — Identify coverage and source data for SPPI and prepare a roadmap. Responsible: Statistics Mauritius.
  - Target Date: December 2019 — Study possibilities to enlarge coverage of CPI and CoPI. Responsible: Statistics Mauritius.

- Mission funding: partly funded by AFRITAC South (AFS).

### Statistics Mauritius price index program — overview
- Published indexes: CPI, PPI-M, PPI-A, CoPI, XPI, MPI.
- Metadata for all published indexes available on Statistics Mauritius website.
- Statistics Mauritius is an SDDS subscriber and reports CPI COICOP data to IMF Statistics Department.
- Centralization of the price index program is in progress; opportunities to:
  - increase program documentation;
  - standardize index practices related to product quality adjustment and replacement;
  - improve outlet sample management;
  - devise a long-term systems strategy to increase capacity and reduce program risk from reliance on external systems resources.

### Consumer Price Index (CPI) — scope, coverage, weights, collection, compilation, publication
- Scope and coverage:
  - CPI measures price changes of a fixed basket of goods and services private consumers buy in Mauritius.
  - Covers domestic and foreign residents of Mauritius and Rodrigues; foreign resident coverage restricted to long-term residents living outside enterprise-provided housing areas.
  - Exclusions: purchaser prices and major repairs of owner-occupied housing, gambling, FISIM, illegal activities; interests on home loans are included; other costs of owner-occupied housing excluded.
  - Note: 90 percent of households in Mauritius live in owner-occupied houses; recommendation to expand CPI to cover all costs of owner-occupied housing.
- Weights and classification:
  - CPI weights derived from Household Budget Survey (HBS).
  - 2012 HBS: 6,720 responding households.
  - 2017 HBS: responding households expected to be 7,000.
  - Latest HBS conducted in 2017; rebased CPI to be introduced when April 2018 index published in May 2018.
  - Items with weights under 0.5 percent are excluded and their weight derived to other products in same class.
  - Classification: COICOP; CPI published at group level; recommendation to publish more detailed classification online.
- Price collection:
  - Coverage and sample: price collection covers 1,017 representative varieties in 5 00 outlets throughout Mauritius (note: text contains "5 00").
  - Varieties chosen based on sales volumes; outlets selected using point-of-purchase information from HBS and regional distribution.
  - Timing and frequency: prices collected weekly or monthly between the 12th and 19th of the month.
  - There are 7,800 price quotations each month.
  - Perishables collected weekly; others monthly; rents collected quarterly (mission recommends monthly collection).
  - Recommended changes:
    - Collect rents monthly with a six months rotational panel.
    - Change weekly price collection for perishables to monthly covering the entire month by collecting prices from two markets each week of the month.
    - Continue study of hand-held devices and scanner data to reduce data entry errors.
- Index compilation:
  - Jevons formula at elementary aggregate level; Laspeyres for subsequent aggregation.
  - Jevons applied as ratio of long-term price relatives using price of index reference period as base price.
  - Mission recommends moving to short-term price relatives to facilitate replacement items introduction and avoid long imputations.
  - Missing prices: temporary missing imputed to reflect changes of similar products; permanent missing items replaced using overlap method when quality adjustment required.
  - Some products currently excluded from monthly calculation when no imputation is done—this can cause index change even if no price change occurred; recommendation to impute using price changes of products available in both periods.
  - Geography: CPI compiled at national level; consideration of island indexes for Mauritius and Rodrigues.
- Publication and rebase:
  - CPI released within five working days after end of month; publication dates in annual release calendar.
  - CPI is final when published.
  - Publication includes table of main contributors to monthly change and division indexes of current and previous months; quarterly economics bulletin includes more detailed analysis.
  - Metadata published on website.
  - CPI rebased every five years; rebased CPI for April published in May after HBS; rebased index compiled backwards to January of base year.
  - Long time series with a single base year compiled for total CPI only; recommendation to compile long time series for lower levels and publish on website.
- Key recommended target completion dates (selected):
  - Publish CPI with more detailed classification online — Target Completion Date 05/2018.
  - Collect rents monthly with six months rotational panel — Target Completion Date 06/2018.
  - Replace weekly price collection by monthly covering total month — Target Completion Date 08/2018.
  - All missing prices imputed by price change of observed prices — Target Completion Date 08/2018.
  - Study use of hand-held devices — Target Completion Date 12/2018.
  - Study use of scanner data from supermarkets — Target Completion Date 12/2018.
  - Move to use short-term relative in elementary price index compilation — Target Completion Date 06/2019.
  - Compile regional indexes for both main islands if weights reliable — Target Completion Date 06/2019.
  - Compile long time series for lower levels of CPI and publish — Target Completion Date 12/2018.

### Producer Price Indexes — Construction Price Index (CoPI)
- Scope and coverage:
  - CoPI measures change in construction prices including all materials, labor, equipment, and profits; excludes building permit cost and draughtsman’s fee.
  - Current published index covers residential buildings only.
  - From building permits approximately 90 percent are for residential buildings, but share of residential buildings in total construction is lower due to large projects not requiring permits.
  - Recommended: enlarge CoPI coverage to include non-residential buildings; interim use of government standard schedule of rates for institutional construction as proxy.
- Weights and classification:
  - Uses weights throughout entire aggregation structure.
  - Unique classification: lowest level disaggregated by input item, combined to work categories, then aggregated to total residential construction.
- Price collection and model dwelling:
  - Model dwelling based on 2000 housing census covering developments 2000–2007; current model: single story detached house of 138 square meters (1,485 square feet) floor area including plumbing, sanitary, electrical installations.
  - Data collected monthly from sample of 50 outlets in 8 regions and include pricing of 109 items.
  - Replacement items included as necessary; maintain relationships with contractors to facilitate collection and validation.
  - Recommended: update housing models and input materials and weights; attempt separation into “grey” building (structure) and finishing’s.
- Index compilation and publication:
  - Uses Carli formula at elementary aggregate level; intends to replace with Jevons at next scheduled rebase; Laspeyres used at aggregate levels.
  - Index, weight, and price reference periods based on second quarter of 2009.
  - CoPI published quarterly, eight weeks after reference quarter; monthly, quarterly and annual indexes disseminated on quarterly basis; published figures are final and not revised.
  - Recommended: change elementary formula to Jevons.
- Target milestones:
  - Enlarge CoPI coverage to include non-residential buildings — When next rebasing.
  - Update CoPI housing models — When next rebasing.
  - Build relationships with contractors — Target Completion Date 12/2018.

### XPI and MPI — scope, coverage, collection, compilation, publication
- Scope and users:
  - XPI and MPI measure pure price changes of goods exported/imported.
  - Users: national accountants, central banks, government departments, businesses for price change measurement, trade volume calculations, terms of trade, exchange rate effect analysis.
- Concepts: follow Export and Import Price Index Manual, Theory and Practice, 2009.
- Classification and frames:
  - Classification: SITC Rev.2.
  - XPI frame: administrative customs export data covering roughly 90 percent of merchandise export value in base year 2013; 10 percent excluded due to heterogeneity and pricing difficulties.
  - Selected export commodities for basket constitute 70 percent of total value of export shipments.
  - MPI frame: covers 89 percent of value of merchandise imported in 2013; 11 percent excluded; commodity basket represents 55 percent of value of imports.
- Price collection, units, replacement:
  - Establishment survey from importing/exporting establishments.
  - Data from Mauritius Sugar Syndicate and Air Mauritius used for sugar exports and aircraft imports; expansion of exporter/importer data encouraged.
  - Response rates average 95 percent of 55 export establishments and 150 import establishments in sample, providing between one to five products per respondent.
  - Export prices reported FOB, mostly contract based; import prices reported CIF, mostly contract based.
  - Prices reported in currency of transaction and converted to Mauritian Rupee using rate closest to transaction date.
  - Recommendation: keep quantities and units constant during repricing; perform customs unit value analysis to confront and replace survey data; expand use of alternate data sources beyond sugar and aircraft.
- Compilation and publication:
  - Jevons formula at elementary aggregate level and Laspeyres on aggregation.
  - Elementary aggregate indexes (SITC Rev.2 seven-digit) calculated as geometric average of price relatives for each establishment.
  - Good response rates allow possible amendment to questionnaire to include product weights for each establishment.
  - Statistics Mauritius does not use customs-based unit value prices in trade indexes; analysis of unit values recommended.
  - Publication: released on website within a quarter of reference period; XPI and MPI are quarterly indexes despite monthly collection on export side.
  - Reference period for index, weight, and price is 2013; indexes rebased every five years with next scheduled for 2019 (base year 2018).
- Target milestones:
  - Keep MPI and XPI quantities and units constant during repricing — Target Completion Date 06/2018.
  - Expand MPI and XPI pricing questionnaires to include product weights below company level — Target Completion Date 12/2018.
  - Perform customs data unit value analysis — Target Completion Date 12/2018.
  - Receive administrative sources beyond sugar and aircraft imports — Ongoing.

### Producer Price Index for Agriculture (PPI-A)
- Scope and coverage:
  - PPI-A includes most agricultural products representing about 79 percent of total production; forestry, fishing, and agricultural services excluded.
  - National accounts department collects its own fishing prices.
- Inputs and publication:
  - Agriculture input prices collected and provided to national accounts to deflate intermediate inputs; input price indexes not published externally.
  - Recommendation: formalize and publish an agriculture input price index.
- Classification and weights:
  - Uses CPC Ver.2.1.
  - Division 01 Crop Products with groups including 012 Fresh vegetables; 013 Fruit and nuts; 014 Oilseeds and oleaginous fruits; 015 Edible roots and tubers; 016 Stimulant and spice; 018 Sugar cane; 019 Flowers, ornamental plants.
  - Division 02 Animals & Animal Products.
  - Two-stage base period weighting: base period weights derived by multiplying average production across three consecutive years with the middle year as reference period, currently 2013.
  - 12 monthly baskets of commodity groups with different weights to account for seasonality.
- Price collection:
  - Sugar cane and tea leaf: marketing agency data.
  - Vegetables: weekly auction markets in two towns.
  - Fruits: prices from producers or purchasers.
  - Animals and animal products: marketing agencies and producers.
  - Auction coverage: plans to include third auction site in Flacq.
  - Note: share of sales via marketing agencies has decreased; increased direct surveying of producers recommended.
- Compilation and publication:
  - Missing prices currently handled by last observation carried forward.
  - Aggregated using Laspeyres formula.
  - Published quarterly, eight weeks after reference quarter; essentially final.
  - Only revisions for sugar cane and tea updated with final crop year data.
  - Weights updated infrequently; Census of Agriculture every 10 years.
- Recommended actions and targets:
  - Replace carry forward method with imputation — Target Completion Date 05/2018.
  - Add auction from Flacq to collection sample and increase surveying of producers — Target Completion Date 08/2018.
  - Formalize and publish agriculture input price index — Target Completion Date 1/2021.
  - Improve Census of Agriculture to include turnover information — Target Completion Date 2021.
  - Use Census of Agriculture to improve sampling stratification — Target Completion Date 2022.

### Producer Price Index for Manufacturing (PPI-M)
- Scope and users:
  - Measures changes in effective prices received by producers in manufacturing for output sold on domestic market.
  - Excludes export oriented enterprises (EOE) identified in Ministry of Industry registry; recommendation to include EOEs and create separate export manufacturing aggregate.
  - Uses: leading indicator for consumer inflation, price deflators for national accounts, contract escalation, econometric modelling.
- Coverage and classification:
  - Includes large and small establishments within divisions 10 to 32 of NSIC Rev.2.
  - Classified under 71 groups, 137 classes and 240 sub-classes.
  - Exclusions: divisions 12, 19, 21 and 26.
- Weights and sample:
  - Weights introduced at company level and combined to five-digit industry level.
  - Roughly 400 products selected from a sample of 126 establishments from 2013 CEA, constituting coverage of roughly 60 percent of manufacturing output.
- Price collection and compilation:
  - Representative products selected based on contribution to gross output or turnover.
  - Product replacement when necessary; temporarily missing prices imputed using average price in five-digit sub-class or next highest level.
  - Factory gate prices collected monthly and quarterly; exclude VAT and excise duties.
  - Jevons formula at elementary aggregate level and Laspeyres in aggregation.
  - PPI-M industry-based with weights revised every five years following CEA.
  - Recommendation: produce PPIs also by commodities; consider commodity-based PPI-M.
- Publication:
  - Preliminary monthly indexes published and revised at time of quarterly index release.
  - PPI-M released within one month after reference period; quarterly indicators released within one quarter after reference period.
- Target milestones:
  - Expand PPI-M frame to include EOEs — In next rebasing 05/2019.
  - Produce export manufacturing index within overall PPI-M — In next rebasing 05/2019.
  - Expand coverage adding high growth industries (pharmaceuticals, computers, electronics, etc.) — In next rebasing 05/2019.
  - Produce commodity based PPI-M — In next rebasing 05/2019.

### Producer Price Indexes for Services (SPPIs), deflators, and wage rate index
- Service sector: approximately 75 percent of Gross Value Added.
- Recommendation: develop PPIs for financial services, transportation services, accommodation services, and possibly wholesale and retail services after frame and CEA analysis.
- When CPI used as deflator: replace overall CPI deflator with more detailed CPI series or industry-specific wage rate index if labor costs are the largest input.
- Deflation of foreign trade in services:
  - Statistics Mauritius receives gross output in foreign trade in services from Bank of Mauritius and uses proxy price deflators.
  - Recommendation: knowledge sharing between statistical office and central bank on data sources and methodology.
  - Refinement of deflators indicated in Annex 2 for specific categories is possible.
- Wage Rate Index:
  - Quarterly wage rate index by industry published.
  - Weights derived from ‘Survey of Employment and Earnings in Large (employing 10 or more persons) Establishments.
  - Sample of around 250 establishments; response rate 90 percent.
  - Weights based on number of employees and earnings.
  - Index calculated for regular earned wages (ILO recommendations).
  - Recommendation: start producing a total earnings index (including overtime and irregular payments) to assist national account estimates of total compensation of employees.
- Target milestones:
  - Develop and publish SPPIs for financial services, transportation services and accommodation services — Target Completion Date 02/2021.
  - Replace overall CPI deflators with more specific series or industry wage rate indexes — Target Completion Date 06/2019.
  - Start producing a total earnings wage rate index — Target unspecified.

### Residential Property Price Index (RPPI)
- Development since 2013; IMF missions August 2014 and March 2017 provided assistance.
- Data limitations:
  - Limited property characteristic information; property-mix adjustment likely to follow stratification approach.
  - Only 800 sales during a year; available data: sale, floor area, and address.
- Preliminary results: ready for houses and apartments for Q1 2015 to Q4 2016; price per square meter data is volatile.
- Mission recommendations:
  - Continue validation; volatility expected due to basic stratification and heterogeneity.
  - Target to publish RPPI when data validation final for 2015–2017 with good metadata and explanation of volatility if necessary.
- Weights and census:
  - Weights: sales of houses and apartments used for RPPI weights.
  - National accounts require stock value information; stock weights could be used to produce separate index.
  - Next housing census planned for 2020 could serve as source of weights or assess 2011 results.
- Target milestones:
  - Validate RPPI data and exclude outliers — Target Completion Date 05/2018.
  - Publish first RPPI results with metadata: overall RPPI quarterly and regional indexes annual — Target Completion Date 07/2018.
  - Implement RPPI roadmap from March 2017 — Target Date June 2018 (from priority recommendations).

### Detailed technical assessment — Priority actions, milestones, and targets (selected)
- CPI selected milestones (see CPI section for details and exact dates).
- PPI selected milestones (see relevant sections for dates):
  - Replace carry forward with imputation by average of elementary aggregate — Target Completion Date 05/2018.
  - Add auctions and increase producer surveying — Target Completion Date 08/2018.
  - Formalize agriculture input price index — Target Completion Date 1/2021.
  - Improve Census of Agriculture — Target Completion Date 2021; use results for sampling stratification — Target Completion Date 2022.
  - Expand MPI/XPI questionnaires to include product weights — Target Completion Date 12/2018.
  - Keep MPI/XPI quantities and units constant during repricing — Target Completion Date 06/2018.
  - Perform customs unit value analysis — Target Completion Date 12/2018.
  - Expand CoPI coverage and update models — When next rebasing and build contractor relationships — Target Completion Date 12/2018.
- SPPI and RPPI milestones summarized above.

### Officials met during the mission (selected)
- Li Fa (Aimee) Cheung Kai Suet, Director of Statistics — Statistics Mauritius — Lcheung-Kai-Suet@govmu.org
- Yasmin Cassimally, Deputy Director — Statistics Mauritius — ycassimally@govmu.org
- Set Fong Cheung Tung Shing, Ag. Deputy Director — Statistics Mauritius — scheung-tung-shin@govmu.org
- Mukesh Dawoonauth, Principal Statistician — Statistics Mauritius — mdawoonauth@govmu.org
- (Additional officials from Statistics Mauritius listed with contact emails in source.)

### Annex I — Services Producer Price Indexes: current deflators and proposed improvements (selected items)
- Financial Services and Insurance:
  - Monetary intermediation: current deflator "CPI financial services component"; proposed improvement: measure explicit fees and commissions over time using business-to-business sample or transaction microdata from central bank or financial institutions.
  - Financial Leasing and other credit granting: current deflator "FISIM (loan rate-reference rate, where reference rate equals the midpoint of loan and reference rate)"; proposed improvement: update reference rate to weighted average of overnight lending rate and various bond yield rates.
  - Insurance, reinsurance and pension funding: current deflator "Implicit deflator derived from volume index of the number of insurance policies"; proposed improvement: develop explicit price index by sampling insurance companies and repricing representative constant quality policies.
- Professional Services: current deflator "Overall CPI"; proposed improvement: survey companies to collect charge out rates or use industry-specific wage rate indexes.
- Accommodation and Tourism:
  - Accommodation services — foreign tourists (hotels): current deflator "Implicit deflator derived from volume of tourist arrivals..." Proposed improvement: develop explicit hotel room price index collecting online prices two weeks in advance for Wednesday (business) and Saturday (consumer) stays.
- Utilities:
  - Energy and Water: current deflators "Implicit deflator derived from the difference between gross output and GVA"; proposed improvement: develop explicit price indexes using Central Electricity Board and Central Water Authority unit price data by consumer type.
- Wholesaling and Retailing: current approach uses MPI for imported goods and CPI for local goods applied to gross margin; proposed improvement: develop explicit price deflator or use CEA to design proxy pricing or surveys.
- Transportation: current deflator "CPI for air/road transportation services"; proposed improvement: develop explicit business price indexes (e.g., frequent business travel air fares, for-hire trucking by route).
- Information and Communication:
  - Telecommunications (65 percent): current deflator "CPI telephone call price series"; proposed improvement: obtain turnover and volume measures from ICTA and develop constant quantity unit prices or direct price indexes for service options.
- Real Estate, Education, Health:
  - Real estate commissions: current deflator "Overall CPI"; proposed improvement: derive implicit deflator by dividing gross commissions by number of transactions or track commission rates.
  - Education and Health: current deflators "CPI series on education services" and "CPI series on health services"; proposed improvement: use more detailed CPI series that separate goods from services.
- Trade in Services:
  - Imports of travel: current deflator "CPI from visiting countries adjusted for the exchange rate"; proposed improvement: use accommodation services consumer and producer price indexes from visiting countries.
  - Imports of transportation services: current deflator "IMF overall world GDP deflator"; proposed improvement: use weighted average of national GDP deflators from main import countries adjusted for exchange rate.
  - Exports of business services: current deflator "National account deflators for communications, insurance and financial services"; proposed improvement: use specific business service PPIs once developed or indices derived from industry wage rates.

_Italic: Source: cr18262 - INTRODUCTION (IMF staff report)._

### INTRODUCTION _________________________________________________________________________________ 6

### INTRODUCTION _________________________________________________________________________________ 6

### SUMMARY OF MISSION OUTCOMES AND PRIORITY RECOMMENDATIONS
- A technical assistance mission took place during March 14–23, 2018 to assess the methodological soundness of all price indexes compiled by Statistics Mauritius.
- Indexes assessed: producer price index on agriculture (PPI-A), producer price index on manufacturing (PPI-M), export and import price index (XPI and MPI), and the construction price index (CoPI).
- Mission also discussed broadening the coverage of the producer price index to include services (SPPI) to improve national accounts deflators, especially for hotels, business services, education, and health.
- The mission reviewed the consumer price index (CPI) and the status of the project to develop a residential property price index (RPPI) since the previous price statistics mission in March 2017.
- Rationale: reliable price statistics are essential for informed economic policy making, decision making by the private sector, foreign investors, government departments, and the public, and for robust estimates of real GDP.
- Assessment of current methodologies:
  - Methodologies employed by Statistics Mauritius are sound and largely in line with international guidelines and practices.
  - All price indexes use similar aggregation methodologies and the same index compilation system.
  - Statistics Mauritius is dependent on a consultant to maintain the compilation system.
  - Recommendation: improve documentation and develop more internal system knowledge to reduce vulnerability.
- Coverage observations:
  - The PPI-A, the PPI-M, and the XPI and MPI cover all important industries (see Annex 1).
  - The CoPI covers only residential properties.
  - The CPI excludes costs of owner occupied housing except interest on home loans.
  - Users would benefit from an extension of the coverage of both the CoPI and the CPI.
  - There is scope to develop the SPPI and the RPPI for Mauritius.
- Data collection context:
  - Statistics Mauritius is conducting its Census of Economic Activities 2018.
  - The first phase, consisting of data collection from small establishments (those having less than 10 employees), has started.
  - The second phase, during which data will be collected from large establishments (10 or more employees), will be conducted in 2019.
- Legal and institutional context:
  - Statistics Mauritius collects and disseminates statistics under the authority of the Statistics Act 2000, amended in 2011 and 2017.
  - The Statistics Act provides the necessary legal framework for data collection and dissemination, data sharing with other parties, confidentiality, and users consultations.
  - Recommendation: explore ways of improving the application of the Statistics Act to acquire business survey data and administrative data from both government departments and private corporations to improve coverage and quality, while reducing survey operation costs and response burden.
  - Recommendation: engage the Bank of Mauritius in data sharing initiatives through annual senior management meetings, quarterly management meetings, and ongoing working level interactions to ensure data exchange.

### PRIORITY RECOMMENDATIONS (TABLE 1 SUMMARY)
- Target Date: June 2018
  - Implement the roadmap for RPPI development set in March 2017.
  - Responsible Institution: Statistics Mauritius
- Target Date: June 2018
  - Identify the coverage and source data for the SPPI and prepare a roadmap for development.
  - Responsible Institution: Statistics Mauritius
- Target Date: December 2019
  - Study the possibilities to enlarge the coverages of the CPI and the CoPI.
  - Responsible Institution: Statistics Mauritius

### MISSION FUNDING AND SUPPORT
- The mission was partly funded by AFRITAC South (AFS).

*Source: cr18262 - INTRODUCTION _________________________________________________________________________________ 6*

### INTRODUCTION

### INTRODUCTION

### Statistics Mauritius price index program — overview
- Statistics Mauritius publishes on a regular and timely manner the following price indexes: the consumer price index (CPI), the producer price index on manufacturing (PPI-M), the producer price index for agriculture (PPI-A), the construction price index (CoPI), the export price index (XPI), and the import price index (MPI).
- Metadata for all published indexes are available on the website of Statistics Mauritius.
- Statistics Mauritius is an SDDS subscriber and also reports regularly the CPI COICOP data to the IMF’s Statistics Department.
- Statistics Mauritius is currently in the process of centralizing its price index program; this transition presents opportunities to:
  - increase program documentation;
  - standardize index practices related to product quality adjustment and replacement;
  - improve outlet sample management;
  - devise a long-term systems strategy to increase capacity for newly developed surveys and to reduce program risk associated with systems resources not being directly employed by Statistics Mauritius.

### CONSUMER PRICE INDEX (CPI) — scope, coverage, and main uses
- The consumer price index (CPI) measures the price changes of a fixed basket of goods and services that the private consumers buy in Mauritius.
- Coverage:
  - The CPI covers domestic and foreign residents of both islands, Mauritius and Rodrigues.
  - The foreign resident coverage is restricted to the long-term residents living outside the enterprise provided housing areas.
  - Short-term foreign workers housed by hiring enterprises have negligible expenditure (Statistics Mauritius study).
- Uses:
  - Formulation of monetary and fiscal policies.
  - Wage negotiations, indexing pensions and social security benefits, indexing other payments such as rent.
- Exclusions and treatment:
  - Excludes purchaser prices and major repairs of owner-occupied housing, gambling, and financial intermediation services indirectly measured (FISIM).
  - Illegal activities, such as prostitution and narcotics, are excluded.
  - Interests on home loans are included; other costs of owner-occupied housing are excluded.
  - As 90 percent of households in Mauritius live in owner-occupied houses, the CPI should cover also costs of owner-occupiers other than the interest.
- Recommended Action:
  - The CPI coverage should be expanded to cover all costs of owner-occupied housing.

### CPI — weights and classification
- Weights:
  - CPI weights are derived from the household budget survey (HBS).
  - Underreporting corrections: some product groups (e.g., alcoholic beverages and tobacco) are corrected using other data sources like tax data.
  - Items with weights under 0.5 percent are excluded and the weight is derived to the other products in the same class.
- HBS details:
  - The HBS covers the whole calendar year and all households in Mauritius.
  - The current weights are from the HBS conducted in 2012.
  - The latest HBS was conducted in 2017 and the rebased CPI will be introduced when the April 2018 index is published in May 2018.
  - The 2012 HBS had 6,720 responding households, while the 2017 HBS responding households are expected to be 7,000.
- Classification:
  - The CPI uses the Classification of Individual Consumption according to Purpose (COICOP).
  - The CPI is published on the group level; detailed data are available upon request but would be more useful if published in the online database.
- Recommended Action:
  - The CPI with more detailed classification should be published online.

### CPI — price collection
- Coverage and sample:
  - Price collection covers 1,017 representative varieties in 5 00 outlets throughout Mauritius.
  - Varieties are chosen based on sales volumes.
  - Outlets selected using point-of-purchase information collected jointly with the HBS and based on regional distribution and sales volumes.
- Timing and frequency:
  - Prices are collected weekly or monthly between the 12 th and 19 th of the month.
  - There are 7,800 price quotations each month.
  - Prices of perishable items are collected on a weekly basis; others monthly. Rents are collected quarterly.
- Recommended change:
  - Mission recommends rents should be collected on a monthly basis; as lease contracts are annual, rents could be collected every six months with a monthly panel survey so rents would be included monthly into the index.
- Perishables and markets:
  - Prices of vegetables, fruits, fish, and meat are collected weekly from eight markets.
  - Because these prices can be volatile, it is recommendable to cover the whole month by collecting prices from each market only once a month, two markets each week and each market during the same week of the month.
- Validation:
  - Accuracy of prices is verified after collection; big unexplained price changes are checked with the outlet.
  - Cross-checks of selected items of the PPI and MPI are made.
- Data capture:
  - Price collection is carried out with paper forms; data are transferred manually and, for weekly collection, into an excel file.
  - Statistics Mauritius is interested in moving to tablets or hand-held devices and studying scanner data possibilities; mission encourages continued study due to current data entry error risk.
- Recommended Actions:
  - The rents should be collected monthly with a six months rotational panel.
  - The weekly price collection of perishable products should be changed to a monthly price collection covering the entire month by collecting prices from two markets each week of the month.
  - Continue to study the possibilities of using hand-held devices and scanner data in the price collection process.

### CPI — index compilation
- Formulas and practices:
  - CPI uses the Jevons formula at the elementary aggregate level and the Laspeyres formula for subsequent levels aggregation.
  - Jevons is applied as a ratio of long-term price relatives using the price of index reference period as base price.
  - Mission recommends moving to the use of short-term price relatives in the future because short-term relatives are more effective when replacement items must be introduced (no long imputation of prices backwards needed).
- Missing prices and imputation:
  - Temporarily missing prices are imputed to reflect price changes of similar products.
  - Permanent missing items: replacement introduced using the overlap method if quality adjustment required.
  - For some products no imputation is done; they are excluded from monthly calculation but not from the base years average—this can cause index change even if no price change occurred.
  - Use of short-term price relatives and imputing missing prices with price change of prices available in both time periods would provide robust elementary aggregate indexes.
- Geography:
  - CPI is compiled at national level; Statistics Mauritius and the regional office on Rodrigues Island are considering publication of island indexes.
- Recommended Actions:
  - Statistics Mauritius should consider moving to the use of short-term price relatives in the elementary price index compilation.
  - In imputation the price change used should reflect the price change of those products that are available in both periods.

### CPI — publication and upcoming changes
- Release schedule:
  - CPI is released within five working days after the end of the month.
  - Publication dates are in the annual release calendar.
  - CPI is final when published.
- Content:
  - Publication includes a table of the main contributors to the monthly change, and the division indexes of current and previous months.
  - Quarterly economics bulletin includes more detailed analysis.
  - Metadata are published on the website.
- Rebase practice:
  - CPI is rebased every five years.
  - The rebased CPI for April was published in May, the year after the HBS.
  - The rebased index was compiled backwards to January of the base year.
  - Long time series with a single base year are compiled for the total CPI only, not for lower levels of classification.
- Recommended action:
  - Long time series for lower levels of the CPI should be compiled and published on the website.

### PRODUCER PRICE INDEXES — Construction Price Index (CoPI) — scope, coverage, and main uses
- Scope:
  - CoPI measures change in construction prices, including all materials, labor, equipment, and profits.
  - Excludes cost of building permit and draughtsman’s fee per international guidelines.
- Current coverage:
  - Statistics Mauritius currently publishes an index covering residential buildings only.
  - From building permits approximately 90 percent are for residential buildings, but large building projects or governmental building projects do not require a building permit; thus share of residential buildings from total construction is lower.
- Uses:
  - Deflator for measurement of real growth in the entire construction sector (residential and non-residential).
  - Evaluating cost fluctuations in contracts; renegotiating owner-tenant agreements.
- Recommended Action:
  - The coverage of the CoPI should be enlarged to cover construction of non-residential buildings.
  - Interim measure: acquisition and use of government standard schedule of rates for institutional units’ construction when developed can be used for that segment and as a proxy for commercial and institutional buildings until they are developed.

### CoPI — weights and classification
- Weights:
  - CoPI uses weights throughout the entire aggregation structure.
- Classification:
  - Unique to this index; at the lowest level disaggregated by input item, then combined to the work category (plumbing, electrical, painting, etc.), then aggregated to a total for residential construction.

### CoPI — price collection and replacement
- Model dwelling:
  - Most common model dwelling determined from the 2000 housing census and covers developments assumed to have taken place between 2000–2007.
  - Drawings provided by the Mauritius Housing Company Ltd.; model should be updated regularly and cover all major types of houses built.
  - Current model specifications: single story (ground floor) detached house of 138 square meters (1,485 square feet) of floor area, including plumbing, sanitary installation, and electrical installation.
  - Contractors’ wage and profit margin should be included; separation may be difficult and requires communication with contractors.
  - Discussion to separate model into (a) a “grey” building (structure) and (b) the rest of the finishing’s because it is rare for one contractor to complete entire residential building.
- Sample and data:
  - Data collected every month from a sample of 50 outlets in 8 regions and include pricing of 109 items.
  - Replacement items included as necessary; close monitoring of price movements and querying discrepancies from producers.
  - Maintaining good relationships with contractors will facilitate collection and validation.
- Recommended Actions:
  - Housing models need to be updated, particularly input materials and weights.
  - Attempts should be made to build relationships with contractors to improve data quality given the small and diverse nature of the construction industry.

### CoPI — index compilation and publication
- Compilation:
  - CoPI uses a Carli formula on the elementary aggregate level although Statistics Mauritius intends to replace this with a Jevons at the next scheduled index rebase.
  - Recommended formula at the elementary aggregate level is Jevons.
  - A Laspeyres index is used at the aggregate levels.
  - Similar input costs by region are combined for the elemental index, followed by a weighted average of price relatives across input and weight categories.
  - Index, weight and price reference periods are all based on the second quarter of 2009.
- Recommended Action:
  - The formula at the elementary aggregate level should be changed to Jevons.
- Publication:
  - CoPI is published quarterly, eight weeks after the reference quarter.
  - Monthly, quarterly and annual indexes are disseminated on a quarterly basis via the Statistics Mauritius website and a printed quarterly publication beginning at the category level.
  - Published figures are final and as such not revised.

### XPI and MPI — scope, coverage, main users, and concepts
- Scope and uses:
  - Export and import price indexes (XPI, MPI) provide a measure of pure price changes of goods exported to or imported from other countries.
  - Users: national accountants, central banks, government departments, businesses—for measuring price changes, analyzing effects on sectors, calculating changes in trade volume, calculating terms of trade, and analyzing exchange rate effects on trade prices.
- Concepts:
  - Concepts and definitions largely follow the Export and Import Price Index Manual, Theory and Practice, 2009.

### XPI and MPI — weights and classification
- Classification:
  - Follow Standard International Trade Classification Revision 2 (SITC Rev.2).
- XPI frame and coverage:
  - Frame: administrative customs export data (domestic exports and re-exports) which include roughly 90 percent of the value of merchandise exported during base year 2013.
  - Ten percent excluded due to heterogeneity and pricing difficulties (examples: precious stones, jewelry, recorded media and free publications, and products in Sections 1, 3, 7 and 9 of SITC Rev.2).
  - Selected commodities for basket constitute 70 percent of total value of export shipments.
  - Trade value weights applied at SITC Rev.2 seven-digit level and aggregated to two-digit level; consistent between exports and imports.
- MPI frame and coverage:
  - Similar frame and sampling strategy covering 89 percent of the value of merchandise imported in 2013.
  - Eleven percent excluded due to heterogeneity and pricing challenges (examples: precious stones, jewelry, cellular telephones, recorded media and free publications, aircraft, helicopters and marine vessels, certain machine parts, textile wastes and Section 9 of SITC Rev.2).
  - Commodity basket represents 55 percent of value of imports.

### XPI and MPI — price collection, units, and replacement
- Collection method:
  - Establishment survey collects prices from importing and exporting establishments.
  - Data from Mauritius Sugar Syndicate and Air Mauritius are used for sugar exports and aircraft imports respectively; efforts should be made to expand usage of exporter/importer data.
- Sample and response:
  - Response rates average 95 percent of the 55 export establishments and 150 import establishments in sample, providing between one to five products per respondent.
  - Exporters concentrated in commodities like sugar, seafood, and textiles; exporters phoned monthly and visited quarterly. Prices reported on FOB basis and are mostly contract based.
  - Importers less concentrated and visited quarterly; prices reported on CIF basis and are mostly contract based.
- Currency and conversion:
  - Prices reported in currency of transaction and converted to Mauritian Rupee using rate closest to transaction date.
- Units and quantities:
  - In some cases, unit quantities are not held constant and this should be rectified to ensure constant quantity and quality price movement; could be automated in the system in the long run.
- Item replacement and imputation:
  - Item replacement done when current item phased out or obsolete; exporter/importer contacted for new item selection.
  - Traders who cease operations are replaced using administrative customs records.
  - Missing prices imputed based on price changes of similar items within the elementary aggregate from the same time period.
- Recommended Actions:
  - Quantities and units should be kept constant during repricing.
  - Perform custom data unit value analysis to confront and replace survey data.
  - Expand the use of alternate data sources beyond only sugar exports and aircraft imports.

### XPI and MPI — index compilation and publication
- Compilation:
  - XMI and MPI use the Jevons formula at the elementary aggregate level and the Laspeyres formula on aggregation.
  - Elementary aggregate (SITC Rev.2 seven-digit) indexes are calculated as a geometric average of the price relatives for each establishment.
  - Given good response rates, questionnaire could be amended to include product weights for each establishment.
  - Statistics Mauritius does not use customs-based unit value prices in trade indexes; analyzing unit value data would be useful to understand price movements and compare to survey prices.
- Recommended Action:
  - The pricing questionnaire should be expanded to include product weights below the company (outlet) level.
- Publication:
  - Indexes are released on the website within a quarter of the reference period.
  - Export and import price indexes are quarterly indexes, despite monthly collection on export side.
  - Both indexes have 2013 as reference period for index, weight, and price.
  - Published figures are provisional when first published and are revised and final in the next quarter.
  - Indexes are rebased every five years based on customs data with the next one scheduled for 2019 (base year 2018).

### Producer Price Index for Agriculture (PPI-A) — introduction (start)
- The producer price index for agriculture (PPI-A) provides a measure of the average change in the prices which producers receive for their agricultural products.
- Purposes include:
  - compilation of national accounts at constant prices for the agricultural industry;
  - economic analysis, including monitoring of price trends and sensitivity to domestic and international price changes, and developments in agricultural production;
  - monitoring the implementation of agricultural price policy decisions.

*Source: cr18262 - INTRODUCTION (IMF staff report).*

### introduction or modification of subsidy/support prices; and (4) forecasting price movements in

### introduction or modification of subsidy/support prices; and (4) forecasting price movements in

### Producer Price Index for Agriculture (PPI-A) — scope, weights, classification, and collection
- Coverage: Most agricultural products are included, representing about 79 percent of total production. Forestry, fishing, and agricultural services are excluded. National accounts department collects its own fishing prices.
- Inputs: Agriculture input prices are collected and provided to the national accounts to deflate intermediate inputs of the agricultural industry. Input price indexes are not published externally.
- Recommended Action:
  - Formalizing and publishing an agriculture input price index should be considered.
- Classification: PPI-A uses Central Product Classification (CPC) Ver.2.1 and includes two main divisions:
  - Division 01 Crop Products — Group 012 Fresh vegetables; Group 013 Fruit and nuts; Group 014 Oilseeds and oleaginous fruits; Group 015 Edible roots and tubers; Group 016 Stimulant and spice; Group 018 Sugar cane; Group 019 Flowers, ornamental plants.
  - Division 02 Animals & Animal Products.
- Weights: Two-stage base period weighting scheme:
  - Base period weights derived by multiplying average production across three consecutive years with the middle year as reference period, currently 2013.
  - 12 monthly baskets of commodity groups with different weights over the year to account for seasonality.
  - Weight for each commodity group based on total production (as a proxy for sales).
- Price collection sources vary by product:
  - Sugar cane and tea leaf: marketing agency data.
  - Vegetables: price collectors visiting weekly auction markets in two towns.
  - Fruits: prices collected from producers or purchasers such as planters and wholesale purchasers.
  - Animals and animal products: combination of marketing agencies and producers.
- Auction coverage: auction prices collected from two markets on auction day; plans to include a third major auction site in Flacq are supported.
- Data quality note: Share of sales via marketing agencies has decreased; collecting more data directly from producers is preferred where sales volumes have shifted.
- Recommended Actions:
  - Add an auction from the third region (Flacq) to the collection sample.
  - Increase surveying of producers to maintain data quality where volumes through marketing agencies are decreasing.
- Index compilation:
  - Missing prices currently handled by last observation carried forward temporarily.
  - PPI-A aggregated using a Laspeyres formula. Quarterly and annual indexes compiled using weighting pattern based on production value for the base period.
- Recommended Action:
  - Replace the carry forward method for missing prices with an imputation method.
- Publication and changes:
  - PPI-A published quarterly, eight weeks after the reference quarter and is essentially final.
  - Only revisions occur for sugar cane and tea updated with final crop year data.
  - Weights updated infrequently since Census of Agriculture is every 10 years in line with Census of Population.
  - Next Census of Agriculture should collect same information as Census of Economic Activity (CEA) to improve industry composition analysis and sampling stratification.
- Recommended Actions:
  - Census of Agriculture should include turnover information since the industry falls outside scope of the CEA.
  - Use Census of Agriculture results to improve sampling stratification between small and large establishments.

### Producer Price Index for Manufacturing (PPI-M) — scope, coverage, collection, and compilation
- Scope and main users:
  - Measures changes in effective prices received by producers in manufacturing for output sold on domestic market.
  - Does not include output of export oriented enterprises (EOE) identified in Ministry of Industry registry; these should be included and a separate export manufacturing aggregate calculated.
  - Uses: leading indicator for consumer inflation; economic analysis of inflation through production process; price deflators for national accounts; escalation clauses in private contracts; econometric models for forecasting and inventory accounting.
- Recommended Actions:
  - Expand frame to include EOEs and include them in sample.
  - Produce an export manufacturing index as a separate aggregate within overall PPI-M structure.
  - Expand coverage by adding high growth industries to sample (pharmaceuticals, computers, electronics, etc.).
- Weights and classification:
  - Includes large and small establishments within divisions 10 to 32 of NSIC Rev.2.
  - Classified under 71 groups, 137 classes and 240 sub-classes.
  - Data published mainly by division and class; some items by subclass.
  - Exclusions beyond exporting enterprises: divisions 12, 19, 21 and 26 for specified reasons (no manufacturing, insignificant weight, frequent product changes).
  - Weights introduced at company level and combined to five-digit industry level.
- Price collection:
  - Roughly 400 products selected from a sample of 126 establishments from the 2013 Census of Economic Activity, constituting coverage of roughly 60 percent of manufacturing output.
  - Representative products selected based on contribution to gross output or turnover.
  - Product replacement when necessary; temporarily missing prices imputed using average price in five-digit sub-class or next highest level.
  - Factory gate prices collected monthly and quarterly; do not include value added taxes or excise duties.
  - Internal editing procedures and respondent follow up used for validation; data confrontation occurs between CPI and export/import price indexes.
- Index compilation:
  - Jevons formula at elementary aggregate level and Laspeyres formula in aggregation.
  - PPI-M is industry-based with weights revised every five years following CEA.
  - Best practice recommendation: produce PPIs also by commodities.
- Recommended Action:
  - Consider producing a commodity based PPI-M in the future.
- Publication:
  - Preliminary monthly indexes published and revised at time of quarterly index release.
  - PPI-M released within one month after the reference period; quarterly indicators released within one quarter after reference period.

### Producer Price Index for Services (SPPIs), deflators, and wage rate index
- Service sector share: approximately 75 percent of Gross Value Added.
- Recommendation: develop PPIs for financial services, transportation services, accommodation services, and possibly wholesale and retail services after frame and CEA analysis.
- For other services: replace overall CPI deflator with more detailed CPI series or an industry-specific wage rate index if labor costs are largest input.
- Recommended Actions:
  - Expand PPI coverage to include financial services, transportation services, and accommodation services.
  - If overall CPI used as deflator, replace it with a lower level CPI series or an industrial wage rate index.
- Deflation of foreign trade in services:
  - Statistics Mauritius receives gross output in foreign trade in services from Bank of Mauritius and uses a variety of proxy price deflators.
  - Knowledge sharing between statistical office and central bank on data sources and compilation methodology is strongly encouraged.
  - Refinement of deflators as indicated in Annex 2 for specific foreign trade service categories is possible.
- Wage Rate Index:
  - Quarterly wage rate index by industry published.
  - Weights derived from ‘Survey of Employment and Earnings in Large (employing 10 or more persons) Establishments.
  - Occupations classified according to ISCO within each sub class weighted NSIC.
  - Data collected from government sources and sample of around 250 establishments; response rate 90 percent.
  - Weights based on number of employees and earnings.
  - Index calculated for regular earned wages (based on ILO recommendations).
- Recommended Action:
  - Start producing a total earnings index (including overtime and irregular payments) to assist national account estimates of total compensation of employees.

### Residential Property Price Index (RPPI)
- Development: Statistics Mauritius developing RPPI since 2013; IMF missions in August 2014 and March 2017 provided technical assistance.
- Data limitations:
  - Limited information on property characteristics; property-mix adjustment likely to follow stratification approach.
  - Only 800 sales during a year; data consists of sale, floor area, and address.
- Preliminary results: Ready for houses and apartments for period Q1 2015 to Q4 2016; price per square meter data is volatile.
- Mission recommendations:
  - Continue analysis of validation; volatility expected due to basic stratification and heterogeneity within strata.
  - Target to publish RPPI when data validation is final for 2015–2017 with good metadata and explanation of volatility if necessary.
- Weights: Sales of houses and apartments used for RPPI weights. National accounts require stock value information; stock weights could be used to produce a separate index.
- Next housing census planned for 2020 could serve as source of weights or assess 2011 results.
- Recommended Actions:
  - More validation of the data before first publication of RPPI.
  - Target to publish first results of RPPI in near future: overall RPPI quarterly; regional indexes annual.

### Detailed technical assessment — Priority actions, milestones, and targets (selected items)
- CPI outcome targets and milestones (selected):
  - Expand CPI coverage to all costs of owner-occupied housing when rebasing and per new CPI manual — Target Completion Date 04/2023.
  - Publish CPI with more detailed classification online — Target Completion Date 05/2018.
  - Collect rents monthly with six months rotational panel — Target Completion Date 06/2018.
  - Replace weekly price collection by monthly covering total month — Target Completion Date 08/2018.
  - All missing prices imputed by price change of observed prices — Target Completion Date 08/2018.
  - Study use of hand-held devices — Target Completion Date 12/2018.
  - Study use of scanner data from supermarkets — Target Completion Date 12/2018.
  - Move to use short-term relative in elementary price index compilation — Target Completion Date 06/2019 (dependent on IT resources and system flexibility).
  - Compile regional indexes for both main islands if weights reliable — Target Completion Date 06/2019.
  - Compile long time series for lower levels of CPI and publish on website — Target Completion Date 12/2018.
- PPI outcome targets and milestones (selected):
  - Enlarge CoPI coverage to include construction of non-residential buildings — When next rebasing.
  - Update CoPI housing models — When next rebasing.
  - Build relationships with contractors to improve CoPI data quality — Target Completion Date 12/2018.
  - Expand MPI and XPI pricing questionnaires to include product weights below company (outlet) level — Target Completion Date 12/2018.
  - Keep MPI and XPI quantities and units constant during repricing — Target Completion Date 06/2018.
  - Perform custom data unit value analysis on MPI and XPI to confront and replace survey data — Target Completion Date 12/2018.
  - Receive administrative sources beyond sugar exports and aircraft imports — Ongoing (dependent on data availability).
  - Formalize and publish an agriculture input price index — Target Completion Date 1/2021.
  - Add additional auctions from other regions (Flacq) to collection sample and increase surveying of producers — Target Completion Date 08/2018.
  - Replace carry forward method with imputation by average of elementary aggregate — Target Completion Date 05/2018.
  - Improve Census of Agriculture and include turnover data — Target Completion Date 2021.
  - Use Census of Agriculture results to improve sampling stratification between small and large establishments — Target Completion Date 2022.
  - Expand PPI-M frame to include EOEs and include them in sample — In next rebasing 05/2019.
  - Produce export manufacturing index within overall PPI-M — In next rebasing 05/2019.
  - Expand PPI-M coverage by adding high growth industries (pharmaceuticals, computers, electronics, etc.) — In next rebasing 05/2019.
  - Produce commodity based PPI-M — In next rebasing 05/2019.
- SPPIs and RPPI milestones (selected):
  - Develop and publish SPPIs for financial services, transportation services and accommodation services — Target Completion Date 02/2021.
  - Replace overall CPI deflators with more specific series or industry wage rate indexes — Target Completion Date 06/2019.
  - Start producing a total earnings wage rate index — Target unspecified.
  - Validate RPPI data and exclude outliers — Target Completion Date 05/2018.
  - Publish first RPPI results with metadata: overall RPPI quarterly and regional indexes annual — Target Completion Date 07/2018.

### Officials met during the mission (selected list)
- Li Fa (Aimee) Cheung Kai Suet, Director of Statistics — Statistics Mauritius — Lcheung-Kai-Suet@govmu.org
- Yasmin Cassimally, Deputy Director — Statistics Mauritius — ycassimally@govmu.org
- Set Fong Cheung Tung Shing, Ag. Deputy Director — Statistics Mauritius — scheung-tung-shin@govmu.org
- Mukesh Dawoonauth, Principal Statistician — Statistics Mauritius — mdawoonauth@govmu.org
- (Additional officials listed from Statistics Mauritius with contact emails.)

*Source: IMF staff mission report excerpts as provided in the supplied content.*

### Annex I. Contribution to Gross Value Added by Industry

### Annex I. Contribution to Gross Value Added by Industry

### Services Producer Price Indexes — Current Deflators and Proposed Improvements (Mauritius)

- Document structure: lists service industry components, current deflators, and proposed improvements to develop explicit price indexes or better proxies.

### Financial Services and Insurance
- Monetary intermediation
  - Current deflator: "CPI financial services component"
  - Proposed improvement: "Measure price changes in explicit fees and commissions over time using a sample of business to business transactions. This requires improved survey questionnaires or the acquisition of transaction microdata from the central bank or financial institutions."
- Financial Leasing and other credit granting
  - Current deflator: "FISIM (loan rate-reference rate, where reference rate equals the midpoint of loan and reference rate)"
  - Proposed improvement: "Update reference rate to be weighted average of overnight lending rate and various bond yield rates."
- Insurance, reinsurance and pension funding
  - Current deflator: "Implicit deflator derived from volume index of the number of insurance policies"
  - Proposed improvement: "Develop an explicit price index by sampling insurance companies and select representative constant quality policies and reprice them over time. Stratify by insurance line (auto, property, etc.)."
- Credit unions
  - Current deflator: "N/A"
  - Proposed improvement: "Contact Ministry of Industry to gauge cooperative growth and include if the size is significant. Use FISIM pricing if possible, otherwise use the sum of costs approach."
- Central bank
  - Current deflator: "Central bank aggregate wage rate index"
  - Proposed improvement: "Appropriate measure."
- Stock brokering
  - Current deflator: "brokerage fees"
  - Proposed improvement: "Measure over time constant quality commission fees."
- Financial services commission, stock exchange, currency exchanges and financial administration
  - Current deflator: "CPI financial services component"
  - Proposed improvement: "Use wage rate indexes for detailed financial industries."
- Non-Banking and global business investment holdings
  - Current deflator: "CPI financial services component"
  - Proposed improvement: "Improve MOU with FSC to acquire more detailed data on financial transactions and develop price deflators based on results."

### Professional Services
- Legal services, head offices; Management & consulting services; Engineering services; Architectural services; Accounting services
  - Current deflator: "Overall CPI"
  - Proposed improvement (common): "Best option: Survey companies and collect charge out rates, if not feasible use industry specific wage rate indexes." (Engineering and Architectural: "collect model prices or constant quality charge out rates"; Accounting: "follow representative contracts")
- Administrative & support services
  - Current deflator: "Overall CPI"
  - Proposed improvement: "Use an industry specific wage rate."

### Accommodation and Tourism
- Accommodation Services — Local tourists
  - Current deflator: "CPI accommodation services"
  - Proposed improvement: "Appropriate measure."
- Accommodation Services — Foreign tourists - hotels (consumer and business)
  - Current deflator: "Implicit deflator derived from volume of tourist arrivals from passport and immigration office. Tourism receipts are measured by foreign currency cash deposits to financial institutions"
  - Proposed improvement: "Develop an explicit price index from a sample of hotels and for a sample of rooms. Collect price data online, two weeks in advance, always for a Wednesday night stay (business price) and a Saturday night stay (consumer) at the time of CPI collection. Use tourism passport data to determine business traveler regions, routines and practices."
- Accommodation Services — Foreign tourists - resorts
  - Current deflator: "Implicit deflator derived from volume of tourist arrivals from passport and immigration office. Tourism receipts are measured by foreign currency cash deposits to financial institutions"
  - Proposed improvement: "Meet with some resorts and explain what needs to be measured and the difficulty in bundling. Ask about their pricing structures and develop a questionnaire to produce an explicit price index. Ask them: How do they determine their cost structures? What percentage is for accommodations versus food, drinks, activities, etc.? What do you include when you report your earnings? Then develop a pricing model accordingly."
- Food Services — Local restaurants
  - Current deflator: "CPI for local restaurants"
  - Proposed improvement: "Appropriate measure."
- Food Services — Caterers
  - Current deflator: "CPI for local restaurants"
  - Proposed improvement: "Use a weighted average of the PPI-M price for food and the catering industry wage rate index if labor costs are a significant percentage."

### Utilities
- Energy
  - Current deflator: "Implicit deflator derived from the difference between gross output and GVA"
  - Proposed improvement: "Develop an explicit price index based on Central Electricity Board data on the unit price per gigawatt by consumer type, domestic, commercial, institutional and compare to the current deflator and incorporate as necessary."
- Water
  - Current deflator: "Implicit deflator derived from the difference between gross output and GVA"
  - Proposed improvement: "Develop an explicit price index based on Central Water Authority data on the unit price per cubic meter by consumer type, domestic, commercial, institutional and irrigation and compare to the current deflator and incorporate as necessary."

### Wholesaling and Retailing Services
- Current approach: "Imported goods are deflated using the MPI and local goods are deflated using the CPI. This is applied to the gross margin value that is derived from total output at a fixed ratio by industry."
- Proposed improvement: "Develop an explicit price deflator, however given the poor response rates to surveys, use the results from the latest CEA to analyze the industry composition. Questions to answer could include: How many wholesalers are classified to the BR? What are their sizes? What commodities are typically wholesaled compared to those bought directly from retailers? Use this information to determine the size split between wholesaling and retailing industries and improve proxy pricing or develop surveys based on average purchase and average selling prices."

### Transportation
- Air transport
  - Current deflator: "CPI for air transportation services to deflate business and consumer output"
  - Proposed improvement: "Develop explicit price indexes for business output by collecting a business price for air travel by frequent business travel destinations."
- Road transport
  - Current deflator: "CPI for road transportation services to deflate business and consumer output"
  - Proposed improvement: "Develop explicit price indexes for business output by collecting a business price for for-hire trucking based on a sample of truckers and a sample of common routes and cargo shipments. Reprice these over time."

### Information and Communication; Software and Broadcasting
- Telecommunications (65 percent)
  - Current deflator: "CPI telephone call price series"
  - Proposed improvement: "Build a long-term relationship with the Information & Communication Technology Agency (ICTA) and ask them to provide both turnover data and volume measures for the providers and to split each by consumers and businesses so they can be used to deflate separately. Then there are two options to price, either derive constant quantity unit prices per service (mobile, land line, internet, etc.,) aggregated by service value or calculate an index using direct prices of service options (phone access, internet subscription, phone data package, etc.,)."
- Software, database, website and broadcasting industries (35 percent)
  - Current deflator: "Overall CPI"
  - Proposed improvement: "Use a wage rate index for specific industries."

### Real Estate, Education, Health, Arts, Other Services
- Real Estate Activities — Real estate commissions
  - Current deflator: "Overall CPI"
  - Proposed improvement: "Surveying agents is not feasible, therefore recommend deriving deflator implicitly by dividing gross commissions by the number of transactions, separated by home sales and land sales, otherwise track commission rates but they are very stable over time and generate large real output."
- Education Services (Private and Public)
  - Current deflator: "CPI series on education services"
  - Proposed improvement: "Appropriate measure."
- Health Services (Private and Public)
  - Current deflator: "CPI series on health services"
  - Proposed improvement: "Consider using more detailed CPI health service series that would not include health goods like pharmaceutical products."
- Arts and Entertainment
  - Current deflator: "Overall CPI"
  - Proposed improvement: "Consider using arts and culture CPI series."
- Other Service Activities (Repairs of goods, non-government organizations, cleaning services)
  - Current deflator: "Overall CPI"
  - Proposed improvement: "Create total services CPI and use that to deflate or use a more detailed CPI series."

### Public Administration
- Levels of government
  - Current deflator: "Government industry wage rate index"
  - Proposed improvement: "Appropriate measure."

### Trade in Services (Imports and Exports)
- Imports of travel
  - Current deflator: "CPI from visiting countries adjusted for the exchange rate"
  - Proposed improvement: "Use accommodation services consumer and producer price indexes from visiting countries."
- Exports of travel
  - Current deflator: "CPI accommodation and food service series"
  - Proposed improvement: "Appropriate measure for consumers but use a producer price index for accommodation services for business visitors."
- Imports of transportation services (air and marine)
  - Current deflator: "IMF overall world GDP deflator"
  - Proposed improvement: "Use a weighted average of national GDP deflators (preferably service GDP deflators) from main import countries adjusted for the exchange rate."
- Exports of transportation services
  - Current deflator: "Domestic aggregate GDP deflator"
  - Proposed improvement: "Use transportation services producer price index once developed."
- Imports of business services
  - Current deflator: "Overall MPI deflator"
  - Proposed improvement: "Weighted average of national PPI service deflators from main import countries adjusted for the exchange rate."
- Exports of business services
  - Current deflator: "National account deflators for communications, insurance and financial services"
  - Proposed improvement: "Use specific business service producer price indexes once they are developed or those derived from industry specific wage rates."

*Source: Annex I. Contribution to Gross Value Added by Industry (Mauritius), IMF.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2018/cr18262.pdf_