Miroslav Jankovic(Statistical Office of Serbia and Montenegro)

Dragi StojiljkovicTatjana Stanojevic-Miladinovic

(Statistical Office of the Republic of Serbia)

Joint UNECE/ILO Meeting on Consumer Price IndicesGeneva, 10-12 May 2006

PRICE COLLECTIONIN UNSTABLE MARKET CONDITIONS

National level: Serbia and Montenegro (Statistical Office of Serbia and Montenegro)

Republican level:Serbia (Statistical Office of the Republic of Serbia)

Montenegro (Statistical Office of the Republic of Montenegro – MONSTAT)

Lower levels: Central Serbia, Vojvodina, Belgrade

INTRODUCTION

Retail price indices in Serbia and Montenegro:

1954 (data produced and published) 1962 (methodology published) Methods are the same for all levels In accordance with international standards

INTRODUCTION

The case of retail price indices in the Republic of Serbia:

Chronology of market conditions (1990-2005)

Price collection Calculation Further development

INTRODUCTION

In the period 1990 – 2005 market conditions in Serbia were frequently changed

The price statisticians had to react in the quickest possible way

UNSTABLE MARKET CONDITIONS

April 1991 to January 1994 – Hyperinflation: Printing paper currency (in December

1993 the highest nominal value of banknote was 500.000.000.000 Dinars)

Dinar devaluations (exchange rate was 1.028.727.207.263 Dinars for 1 DEM as of December 31, 1993)

Dinar denominations (January 1, 1994 1.000.000.000 Dinars = 1 Dinar)

UNSTABLE MARKET CONDITIONS

Hyperinflation – official statistical results: In January 1994 prices changed at the

rate of 60% daily Monthly retail price index in January 1994

(previous month = 100) was 302.760.900 Retail price index in December 1993

(December 1992 = 100) was 346.977.256.912.227

UNSTABLE MARKET CONDITIONS

End of Hyperinflation: Hyperinflation caused complete market

breakdown At January 24, 1994 New dinar was

introduced 13.000.000 Dinars = 1 New dinar 1 New dinar for 1 DEM

UNSTABLE MARKET CONDITIONS

1995 to 2000: Breakdown of the huge trade systems Large number of small shops (with limited

and changeable goods assortment) appeared

Significant share of turnover was relocated into underground and illegal economy

Bigger sample needed to ensure reliable price indices

UNSTABLE MARKET CONDITIONS

2001 to 2005: Foreign investments and privatization The chains of big supermarkets were

established in main towns Small shops almost completely diminished Problem of missing prices and quality

harmonization

UNSTABLE MARKET CONDITIONS

National retail price indices: Retail price index - used as national

inflation measure and deflator of output and assets value

Consumer price index (Cost of living index) - used for salaries (wages), pensions and other social benefits revaluation

BASIC ELEMENTS

Coverage: Prices collected in 15 towns in Serbia

List of products: about 500 products (definitions detailed enough and general enough)

Classifications: national classifications of goods and services by origin and purpose (different from COICOP)

BASIC ELEMENTS

Weights: Structure of retail turnover of goods and

services (for retail price index) Structure of household consumption

(for consumer price index)

BASIC ELEMENTS

Main principles: Products being bought most often and

price dynamics is representative for the whole group of products

Shops that reflect consumers’ habits Price collectors are full-time employees

in regional offices

PRICE COLLECTION

Selection of shops – recording places (with the highest turnover, where prices represent the average of prices in town)

Selection of products (most sold, present for a longer period of time)

Substitution of shops and products (closing of a shop, deficit of a product)

PRICE COLLECTION

Time/period of prices recording: Manufactured non-food goods (from 3rd

to 10th each month) Manufactured food goods (from 11th to

12th) Services (from 16th to 18th) Agricultural goods (in the first and the

third week of each month)

PRICE COLLECTION

Documentation of prices recording Prices recording procedures (auxiliary

papers, data base, sending to Price department)

Validation and control of recorded prices

PRICE COLLECTION

Average prices: Average monthly prices (for a town,

territory, the Republic of Serbia) Average annual prices (simple

arithmetic mean of average monthly prices except for seasonal agricultural goods)

DATA PROCESSING

Indices calculation: Individual indices (for products) Aggregated indices (for groups and

total) Annual indices

DATA PROCESSING

Following indices are published: Current month in relation to: average of

previous year, previous month, same month of the previous year and December of the previous year

Period from the beginning of the year in relation to: average of previous year and same period of the previous year

DISSEMINATION

Treatment of seasonal products Adjusting of price changes to quality

changes:

- minor change of a product

- significant change

- when price change is not

harmonized with quality change

OTHER METHODOLOGICAL ISSUES

Analysis and updating of the product list Introducing COICOP classification Computing seasonal products prices Analysis of various formula effects Excluding the influence of quality

change on price change Introducing hand held computers in

data collecting

FURTHER DEVELOPMENT

Quality of retail price indices is the priority task of official statistics

Data collection improved by creating new instruction for price recording and intensifying the training of price collectors

General intention to produce and publish new CPI in accordance with EU standards and COICOP classification starting from January 2007

CONCLUSION

Miroslav Jankovic(Statistical Office of Serbia and Montenegro)

Dragi StojiljkovicTatjana Stanojevic-Miladinovic

(Statistical Office of the Republic of Serbia)

Joint UNECE/ILO Meeting on Consumer Price IndicesGeneva, 10-12 May 2006

PRICE COLLECTIONIN UNSTABLE MARKET CONDITIONS