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New Consumer Prices Indices (Year 2000=100)

The new series with the year 2000 as base are a revision of the old series based on the year 1990. The new CPI series are based on the expenditure patterns of 1998 that were derived from the 1997/98 Integrated Household Survey (IHS). Due to the time that has elapsed between 1990 and now, it was deemed necessary to revise the CPI basket and the weights of commodities taking into account the change in people’s tastes and the introduction of new commodities on the market over the period.

The categorization of the socio-economic groups in the new series is similar to the one in the old series: High-Income, Medium-Income and Low-Income Groups for the main urban areas of Blantyre, Lilongwe, Zomba and Mzuzu and only the Low-Income Group for the rest of the country. However unlike the groupings in the old series that were based solely on income the new socio-economic groups are based on the poverty datum line derived from IHS data with the High-Income Group being those households at the top end of the line or the Ultra Rich; Low-Income Group being those households at the lowest end of the line and Medium-Income Group being those falling in between the two groups.

The rural CPI is computed for the rest of the district in Malawi. The predominance of households at the lowest end of the poverty datum line in rural areas necessitates the computation of only the low-income index for these areas in each of the three regions.

Notice that the comparative representation of national inflation rates for the two series is a unique feature of this bulletin. The usual inflation rates comparison between National, Urban and Rural series will resume in the subsequent editions.

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