The Export/Import Price Index derives price changes of internationally traded goods and services that are imported to or exported from Barbados. Foreign trade price indices allow policy makers to analyse the impact of international trade on growth and inflation in the domestic economy.
The Gross Domestic Product (GDP) is the measurement of the total flow of output (goods & services) and the total flow of inputs (factors of production) that pass through all the markets of the economy during a specific period (usually one year). The annual and quarterly GDP for Barbados is generated by the expenditure and production approaches.
The Index of Industrial Production (IIP) is an economic indicator used to gauge the productivity of a country over a period of time. It measures the relative change in the production of Industrial commodities. The measurement is related to a fixed year, which is referred to as the base-year. The base-year is normally expressed in the form 1994=100.
The commodities or products are classified under the following headings: Mining and Quarrying, Manufacturing, Electricity, Water and Gas generation.
The source of data for the Index is the monthly Survey of Production and Sales. This covers the major establishments within each industry group and provides data on the output indicators used in the Index. Selection of establishments surveyed is based on the establishments' contribution to Net Value Added as derived from the Industrial Census 1994. It is the difference between an establishment’s gross receipts (i.e. the value of its products sold plus all tangible income received from other sources) and its intermediate consumption (which is, the value of raw materials used plus expenditure on other goods and services utilized).
The Index is calculated primarily on the fixed base method, according to Laspeyres formula - i.e. as a base-weighted average of quantity relatives.
The Retail Price Index is an indicator that records the change in prices of a fixed basket of goods and services on a monthly basis, which depicts the fluctuation of the cost of living (inflation/deflation) on the island.
The fixed basket of goods and services consists of the items the average household would purchase.
No two households are exactly alike in their spending habits. Each purchases a different combination of goods and services for consumption. For example, it would be unusual for one household to use electricity, natural gas, as well as bottled gas (LPG), for cooking. However, these three types of fuel are all priced and included in the Index, since they are important in the expenditure of households in Barbados. Indeed, each household may experience a different rate of inflation.
Generally speaking, therefore, the ‘basket’ includes those goods and services, which are used by the majority of households and those, which are important in terms of the size of the expenditure made on them by households in the island.
The items in the ‘basket’, in addition to being representative of the spending habits of households, must also have their prices associated with specific quantities. Without the quantity/price relation, it would be extremely difficult to measure pure price changes.
Merchandise Trade Statistics measures all goods entering (imports) and leaving (exports) Barbados from or to its regional and international trading partners by air, sea and by post.