Rosstat has been making a number of changes to the calculation of the consumer price index (CPI) since January 2022, according to a press release from the department.
The key one is changes in the calculation of the weekly index estimate. Now it will be carried out according to the Laspeyres formula. In this formula, the structure of consumption (weights of categories of goods and services) is determined based on historical data, that is, consumption in the base period is taken as the basis. Now the price gain is calculated on a week-to-week basis. The monthly index is estimated using the Laspeyres formula. According to Rosstat, the change in methodology will bring the result of accumulated weekly estimates closer to the actual CPI for the month.
In addition, the timeframes for registering prices for weekly and monthly inflation will be changed. Weekly consumer price registrations are postponed from Monday to Friday. “This will allow taking into account prices in food markets that are not working on Monday (36% of all markets monitored by Rosstat), as well as weekend fairs starting on Friday,” the department notes.
Gasoline and diesel prices will be recorded weekly in all monitored cities, and not just in regional centers, as was previously the case, the report said.
Monthly registration of prices will be carried out in the last 5 days of the month (previously it started on the 20th and ended on the 25th of the reporting month). The timing of the disclosure of information on the Rosstat website will not change, the service assures.
The new methodology is unlikely to have an impact on the published inflation indicators, although everything will depend on how the new methodology will be applied in practice, said Alexander Isakov, chief economist at VTB Capital. It will also not eliminate the discrepancy between the operational and mainstream CPI estimates, but bring them closer together. Now, for the weekly assessment, price increases are calculated and summed up in relation to the previous week, and for the monthly inflation index, the price index is first calculated in relation to the end of last year, from which the increases are then calculated, the expert explains.
With this methodology, weekly and monthly data may not be completely comparable if one calculates the cumulative price increases from weekly figures and compares them with the main estimate of price increases for December.
The postponement of the collection date to Friday is another step towards convergence of the operational and main estimates, but whether it will be more volatile or smoother will only become clear over time, Isakov adds.
The clarification of the formula for calculating weekly inflation and the postponement of registration to Friday is indeed a small improvement, agrees Vladimir Bessonov, head of the department for analysis of the real sector and foreign trade at the Institute for Development Center at the Higher School of Economics. Now the methodology for estimating weekly data is not entirely correct, he says: the differences are small, but over a long time, the cumulative effect can give an overestimating bias.
In general, a number of changes are welcome, Bessonov notes. At the same time, the big question is that changes in the calculation methodology were not discussed with the expert community at the Public Council, says the economist.
Data from online checkouts
In addition, from January 2022, Rosstat begins to conduct an experimental parallel calculation of the CPI using new data sources, the Rosstat noted. This includes information from the data of online cash registers, the state system for labeling goods (GIS MT) and information obtained through web scraping (web page sifting technology) or on the basis of monitoring online sales.
“During 2022, the opportunity to obtain complete and reliable information on prices and tariffs for the entire set of observed goods and services, using a combination of various data sources and ensuring maximum automation of this process, will be assessed,” the ministry said in a statement.
As a representative of Rosstat explained to Vedomosti, throughout 2022 the department will calculate inflation in the same way as it was believed in 2021 and publish this result. Simultaneously, an experimental calculation will be carried out based on new sources, but it will not be available to the general public. It is planned to introduce a new methodology, if it is correct, from 2023, he explained.
As part of the experiment, Rosstat will assess the degree of complication of the procedures for automated processing of primary data and the influence of this factor on the correctness and efficiency of calculations.
The changes affect the lower level of processing of primary information, which allows maintaining the comparability of information with previous years, emphasize in Rosstat.
According to Bessonov, the start of the experiment is the most significant change that needs to be paid attention to. “Rosstat came up with the idea of fixing the implementation of“ big data ”in statistics, in particular, in the construction of the CPI. But it is not so much about improving statistics as about introducing new “fashionable” technologies, “the expert said.
The key issue here is the comparability of the series, and it has not yet been resolved, the expert emphasizes. At the expert level, there is some skepticism about the implementation of these sources, the expert adds: “Consumers of statistical information are primarily important not the introduction of know-how, but reliability and comparability.”
Changes in the set of goods
Rosstat also made changes to the set of consumer goods and services for calculating inflation. According to Bessonov, this is a common routine that occurs annually before the new calendar year: it takes into account constantly changing consumer preferences.
The number of items for calculating the CPI for the month increased from 556 to 558: this includes 129 food, 292 non-food products and 137 services. Thus, the number of drugs has expanded: instead of 53, 64 drugs will be monitored, half of which are vital and essential drugs (VED). 12 new medicines are included in the VED records (including hydrogen peroxide, ascorbic acid, Phosphogliv, sodium chloride), 9 are excluded (for example, chlorhexidine, Eliquis). In addition to VED, 18 new drugs were added (including citramon, Miramistin, Ketorol express, Afobazol, Magne B6, valerian extract, activated carbon), 10 were excluded (for example, valocordin, motherwort tincture, Linex, Bromhexin).
It was also decided to combine goods with similar consumer properties. For example, fatty and low-fat cottage cheese will be counted in the same position as “cottage cheese”, and imported and domestic cigarettes and beer in the category of “beer” and “filter cigarettes” will also be combined. In addition, Rosstat will include in one category bread and bakery products of various varieties, women’s shoes made of natural and artificial leather.
Three new in-demand services have been introduced. This includes a trip to Egypt, the cost of a monthly subscription to a fitness center. At the same time, such items as a sightseeing trip by bus through European cities, servicing a bank card in national currency are excluded.
The weekly registration of prices, as in 2021, will be carried out for 106 goods and services, the Federal State Statistics Service said in a statement. At the same time, the list includes four goods (vegetables and fruits – table beets and bananas, medicines – rengalin and ergoferon), excluded three goods and one service (metal tiles, bromhexine, domestic multivitamins without minerals and a trip to Greece).
In November 2021, inflation in annual terms, according to Rosstat, accelerated to 8.40% – the maximum since January 2016. Food products in November rose in price by 10.81% on an annualized basis. Inflation in Russia overcame the Central Bank’s target of 4% at the end of last year, after which it continued to accelerate. Earlier, Russian President Vladimir Putin said that in 2022 it is necessary to ensure the return of inflation to the target level of 4%.
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