Methodological approaches to
recording certain types of services
in the Consumer Price Index in
Belarus
Ekaterina Grikhanova,
National Statistical Committee of the Republic of Belarus
Meeting of the Group of Experts on Consumer Price Indices
Geneva, May 26-28, 2014
INTRODUCTION
Consumer Price Index in Belarus:
 has been estimated since 1991
 follows national concept
 covers 450 items (more than 50 000 monthly quotations)
 is estimated using the COICOP classification
 is estimated using the weights derived from the annual
Household Budget Survey (additional sources are used as well)
– the weights are updated annually
 is estimated using the arithmetic Young formula at higher
level of aggregation
 use of the geometric average at elementary
level for the calculation of average prices
 implementation of electronic tablets for price
collection
Improvements made
 creation of the new software for the whole
for the last two years
process of CPI estimation starting with price
collection to the processing the data at the
national level
 new items in the CPI basket
THE DISCUSSIBLE ITEMS IN THE
BELORUSSIAN CPI
Central heating
The price per 1m2 (1m3) or
the tariff per 1 unit of heat?
Hot water supply
Electricity
Cold water supply
and sewerage
Population is billed by the
differentiated tariffs
CENTRAL HEATING AND HOT WATER SUPPLY
How the population is billed:
Central heating
tariff per 1 Gcalorie
of heating energy
×
average amount of heating
energy consumed per 1m2
of apartment
×
Total apartment
square (m2)
quantity
Price for heating of 1m2 of apartment (1m3 of water)
tariff per 1 Gcalorie
of heating energy
×
average amount of heating
energy per 1m3 of hot
water consumed
Hot water supply
×
Total amount of
hot water
consumed (m3)
CENTRAL HEATING AND HOT WATER SUPPLY cont.
Price for heating of 1m2 of apartment (1m3 of hot water):
(is taken by the NSO of Belarus into CPI estimation)
tariff per 1 Gcalorie
of heating energy
 is regulated by the government, centrally
fixed
 is increased only by regulation of the
Council of Ministers
 is increased usually 2-3 times a year
 there is only one monopolist supplier of
heating energy
average amount of heating
energy consumed per 1m2
of apartment
 population can't influence the amount of
the heat to be consumed
 population just pays for the amount of
heat placed in the bill
CENTRAL HEATING: Belstat`s approach
Price for heating of 1m2 of apartment (1m3 of hot water):
(is taken by the NSO of Belarus into CPI estimation)
As the consumption of the heating energy fluctuates
monthly depending on the outside temperature and other
factors, the following methodology was chosen:
to keep the average amount of consumed heat constant
for the whole heating season (October-May)
to make an adjustment using the actual heating
consumption data for the whole heating season in the
index for May
THE DISSCUSSIBLE ISSUES
The arguments of the opponents of Belstat`s methodology :
 it should be only the tariff per 1 Gcalorie taken in the measurement for
the central heating index in the CPI
 Belstat`s approach overestimates inflation
 the average consumption of heat is the quantitative factor which reflects
the outside temperature and shouldn't be included in inflation estimation
Belstat`s point of view:
 the consumed service for the population is the heating of 1 m2 of the
apartment
 the price for the heating of 1 m2 of the apartment should be taken into
CPI estimation as the measure of this service
 this is the price which population actually pays for the service in their
bills
ELECTRICITY AND COLD WATER SUPPLY
 the tariffs were recently divided according to the amount of
consumption of the particular service
 there is the “social tariff” for the consumption within the
stated norm and the higher tariff for the consumption above
the norm
 the tariffs for electricity are centrally administered and are
the same for the whole territory of the country
 municipal authorities settle tariffs for the cold water and
sewerage – the tariffs above the stated norm differ in the
regions of the country
COLD WATER AND SEWERAGE
Social tariff
within 4.3 m3
4.3
Tariff for the consumption
above 4.3 m3
> 4.3
Average monthly
consumption
of cold water per resident
of the apartment
Average weighted price per resident of the apartment
ELECTRICITY
social tariff
×
relative share of electricity
consumed within the
social norm (<150 KWh)
+
higher tariff
×
relative share of electricity
consumed above the social
norm (>150 KWh)
Average weighted tariff for electricity
QUESTION
In the case when the average percent of the cold water and
electricity consumed above the social norm is relatively
small should it be taken into the measurement of inflation?
In 2013 about 17% of the purchased cold water were paid with a
higher tariff
The average amount of the excess consumption of water per
resident of the apartment varies from 0.2 m3 to 1.5 m3 in different
regions
In 2013 about 84% of electricity consumption related to the social
norm, and about 16% - above the norm
CONCLUSION
Central heating, hot water supply
Electricity, cold water&sewerage
the price for heating of 1 m2 of
apartment (1 m3 of water)
should be taken as the
measurement of these
services in the CPI instead of
the tariff per 1 Gcalorie
Belstat takes into the
measurement all the existing
tariffs (social and higher)
treating them according to the
relative share of these services
paid by each tariff
among 3 possible ways of
measurement of the heating of
1m2 of apartment and 1 m3 of
water was chosen the method
of making the adjustment for
heat consumption figures twice
a year
all the existing tariffs applied to
the whole population should be
taken into the measurement,
even if the share of population
who exceeds the social norms is
relatively small
Thank you
for your attention!
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