Inflation: official and personal. Why do our feelings about price increases sometimes do not coincide with official data?
According to the official data of the Bureau of National Statistics (BNS), an annual inflation in Kazakhstan in June 2022 was 14.5%. However, the majority of Kazakhstanis may feel the price change in different ways, which causes people to think about the artificial “under-reporting” of the official data.
The main reason for this discrepancy is the possible difference between each person’s consumer basket and the BNS basket, especially depending on the region of residence and taste preferences. In addition, it is worth to have meant that there is a phenomenon of perception and sense of inflation, and to judge the overall inflation level in a country by the change in price for one particular product or group of goods is impossible.
How to calculate the personal inflation of 99% of Kazakhstan residents?
We have developed the Dastarkhan Index in order to see into a matter and “land” inflation processes on the majority of Kazakhstanis. The main idea is to estimate the inflation level and purchasing power, according to the most common food set only for Nur-Sultan and Almaty cities so far.
To make up the Dastarkhan Index Jusan Analytics team has selected 5 favorite dishes of Kazakhstanis from the national cuisine:
- Sorpa (first course);
- Besbarmak (second course);
- Vegetable salad;
- Zhent (dessert);
- Tea with milk (drink).
In our opinion that set of dishes covers a significant part of the food basket included in the BNS consumer price index, and an extent may reflect the level of so-called personal inflation. It is worth noting that the calculations we ofer cannot be a substitute for the BNS consumer prices index.
The Dastarkhan Index is similar to such an unusual, but quite popular economic index: Big Mac, Russian salad, borshch. The calculation results will be relevant for the majority of the country’s residents and will partly allow assessing the consumer purchasing power.
The Dastarkhan Index is calculated using the following formula:
The set of dishes cost is determined according to the official statistics and Jusan big-data on retail prices of large retailers in the appropriate cities, and the wage level is determined according to the BNS.
For the convenience of users, we have calculated the Dastarkhan Index based on the calculation of dishes for 1 person. The composition and weight ratio of the products for cooking were verified by Tarih restaurant of Kazakh Signature Cuisine.
According to the data obtained on the basis of Jusan big-data, in June the set of dishes cost of the Dastarkhan Index in Almaty amounted to 2,055 tenge (according to the official statistics – 1,607 tenge), in Nur-Sultan amounted to 1,807 tenge (1,674 tenge).
According to our data most of the products in Almaty are more expensive than indicated in the official statistics (deviation – 27.9%). At the same time, in the capital, the deviation in prices is multidirectional and amounted to 7.9%.
Meat and milk are more expensive than the official statistics show, and vegetables and oils on the contrary, are cheaper.
It should be noted that our sugar prices, the growth of which is one of the main triggers of food inflation in June 2022, are 6.9% lower in Nur-Sultan city and 7.6% lower in Almaty than the BNS data.
According to Jusan big-data for June 2022:
- In a month prices in the capital increased by 4.6% The main driver was the increase in prices for meat – 21.2%., flour – 15.9%. At the same time, there was a seasonal pattern in vegetable prices by more than 6.0%.
- In Almaty, in the month prices increased less significantly, by only 0.2%. Meat and vegetables increased in price by 3.2% and 1.1% respectively, flour and cereals showed a maximum increase of 8.8%.
- Jusan big-data on sugar price growth is much lower than the official data of the BNS show us.
Calculating the quantitative value of the Dastarkhan Index in June, we have obtained the following data:
- for Almaty city resident the Index will be 159 Dastarkhan servings (using the official data – 204);
- for a resident of the capital – 203 Dastarkhan servings (219).
Based on Jusan Analytics the food set cost from the Dastarkhan Index is higher than the BNS data by 7.9% in Nur-Sultan city and by 27.9% in Almaty city.
In Almaty, the inflation rate is lower than in Nur-Sultan city, which does not match to the official statistics. According to the official BNS data for June, the food products monthly inflation level included in the Dastarkhan set in Almaty was 1.3% and 0.8% in the capital. According to Jusan big-data, inflation in Nur-Sultan was equal to 4.6% and in Almaty – 0.2%.
Following the calculations, there is a gap between the rates of price changes obtained by Jusan Analytics and the BNS official statistics: for Nur-Sultan city it is (+3.8p.p.) and for Almaty – (-1.1p.p.).
At the same time, food prices in Almaty city are much higher than in the capital. Thereof we can conclude that the purchasing power of residents of the capital is higher than Almaty residents ones.
In the coming months, we will continue to provide weekly data on the Dastarkhan Index, which will allow the population to assess the personal inflation level. Knowing the personal inflation level will be a guideline, for example, during planning a family budget or making a decision about an expensive purchase.
Jusan Analytics is an analytical structural division of “Jusan Bank” JSC.
This work is for informational purposes only and is not an offer or attempt to provide report, business, financial, investment, legal, tax or other professional advice or services by Jusan Analytics. The publication is based on information that we consider reliable and obtained from dependable open sources, but we do not confirm that all the information provided is absolutely accurate.
We are not responsible for the readers’ use of the information that is contained in the work to make his independent financial decisions. “Jusan Bank” JSC represented by the Jusan Analytics team does not undertake to regularly update the information contained in the publication or correct possible inaccuracies. At the same time, the information in the work is not exhaustive and may be changed at any time without prior notice.
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