The Barbados Statistical Service (BSS) has the mandate for producing the Retail Price Index (RPI) on a monthly basis and sharing it with all users of statistics.
The RPI is a measure of changes in retail prices of a fixed basket of commodities and services, which represent the spending pattern of the majority of households in Barbados. It is normally expressed in percentage terms with reference to a fixed base period. The Barbados Statistical Service RPI team has been working diligently over the last couple of years, to rebase this Index. The continual use of the same weights and base period will eventually show an inaccurate measure of the changes in the consumer basket. Hence, it is necessary to change the reference period (base period) of an index periodically.
The past series has been produced to the month of December 2022, using the base period of July 2001. The rebased RPI series uses July 2018 as its base period and uses the same methodology, as for the previous version. From 2018, price quotations were collected on a revised basket of commodities and services, from selected outlets across the island. Information obtained from the last Survey of Living Conditions (SLC), which was conducted in 2016-2017, was used to inform this selection of the items and outlets in the revised RPI basket.
The new weights used in the computation of the rebased RPI are average expenditure shares (in consumer goods and services) obtained from the average taken from the Household Budget Survey (HBS, 1998) and from the SLC (2016). The value indicates the relative proportion of the average household’s total budget spent on goods and services in the RPI basket; which has significantly changed from 2001 to 2022 as expected. An average was used because the SLC captured temporary measures that were put in place at the time of its enumeration. It was determined that a more realistic demand pattern would be shown, if the average of results from the SLC and the previous Household Budget Survey (HBS 1998) is used.
Consequently, from January 2023 and onward, the Retail Price Index releases will be using the base period July 2018. The monthly rebased RPI (July 2018=100) bulletins for January and February 2023, are now available for release.
Rebased Retail Price Index (RPI)
A comparison of the trends in inflation rates between the old RPI based on July 2001=100 and the Rebased July 2018 RPI series revealed similar patterns generally. The rebased series reflects lower inflation rates, given that it is closer to the base period, with monthly index figures closer to 100% (reference Figure 1 below).
Figure 1 Inflation Rate Comparison between July 2001 and July 2018