Cabo Verde: Technical Assistance Report-Consumer Price Index
IMF Staff Country Reports, November 21, 2023
Source details
- Canonical URL
- Cabo Verde: Technical Assistance Report-Consumer Price Index
Other formats
Bibliographic details
- Published: November 21, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400261084.002
Executive summary and main findings
- Current CPI weights are based on expenditure data collected during the 2015 household income and expenditure survey.
- These data are out of date and there is urgent need to update CPI weights.
- Overall, the methods used to compile the CPI for Cabo Verde largely reflect international standards and best practices; however, there is scope for improvement.
- Instituto Nacional de Estatística Cabo Verde (INECV) has defined the rolling 12-month average as the headline or official index.
- The 12-month rolling average smooths the data; the report states that the headline index (official inflation rate) should not be adjusted or smoothed.
Methodological recommendations
- Index calculation methods should be based on the modified or short-term formula.
- The modified or short-term formula, recommended in the 2020 CPI Manual, is more flexible and allows the outlet and variety samples to remain representative and facilitates the introduction of new items.
- It was recommended that INECV begin using the annual (12-month) change as the headline or official inflation rate for Cabo Verde.
Policy implications and priorities
- Update CPI weights urgently to reflect current expenditure patterns (2015 weights are out of date).
- Adopt index calculation using the modified or short-term formula to improve flexibility in sample representation and item introduction.
- Replace the rolling 12-month average headline definition with the annual (12-month) change as the official inflation rate to avoid smoothing the headline measure.
Content in this bundle
- CABO VERDE Consumer Price Index — JULY 2023