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CHAPTER VIII - PRICES
COLOMBO CONSUMERS PRICE INDEX (Base 2013=100)
It is a common practice for countries to update the basket of goods and services, as well as the weights of the Consumer Price Index (CPI), at regular intervals, typically every five years. This allows for adjustments to be made to reflect changes in expenditure patterns and to incorporate new goods and services available in the market. Consequently, the Colombo Consumer Price Index (CCPI), which was the index reference period of 2013=100, was updated to a new index reference period of 2021=100. The CCPI is calculated on a monthly basis and published on the last working day of each month.
1. Features:
The CCPI (Base: 2021=100), is based on data from the Household Income and Expenditure Survey (HIES) conducted in 2019.
1.1 Index Reference Period:
The year 2021 is the index reference period for the CCPI (Base: 2021=100). The average monthly value of the base period expenditure level on the basket of goods and services in the CCPI (Base: 2021=100) is Rs. 91,880.34. This expenditure level is 52.21% greater than the index reference period expenditure level of Rs. 60,364.73 in the previous index (2013=100). This increase reflects the increased expenditure due to higher income, prices and the changed composition of the consumption basket.
1.2 Weight Reference Period:
The weight reference period is the year 2019. Because it is based on HIES 2019. To reflect international recommendations and best practices, the weights refer to each item’s share in the average consumption expenditures of all urban area households in Colombo.
1.3 Price Reference Period:
Since the year 2019 was not considered normal due to certain events, an average of the two years from January 2018 to December 2019 was considered as the price reference period.
1.4 Market Basket of Goods and Services:
The CCPI (Base 2021=100) basket contains 105 sub-classes of goods and services which are The CCPI (Base 2021=100) basket contains 105 sub-classes of goods and services which arefurther categorized into 12 groups using the internationally recommended Classification of Individual Consumption According to Purpose or COICOP. The share of the food category is 26.23% while the share of the Non – food category is 73.77%.
1.5 Full-year coverage of Consumption patterns :
Expenditure weights were obtained using data on Household Expenditure in the HIES during the 12 months from January 2019 to December 2019. Therefore, it has captured the seasonal variations of consumption patterns.
1.6 Coverage of House Holds in Colombo District urban areas:
The geographical coverage of the CCPI (Base 2021=100) is the same as that of CCPI (Base:2013=100) and it covered urban areas of the Colombo District, i.e. Colombo Municipal Council, Dehiwala - Mt. Lavinia Municipal Council, Moratuwa Municipal Council,Sri Jayawardenapura Municipal Council, Kaduwela Municipal Council, Kolonnawa Urban Council, Seethawakapura Urban Council, Maharagama Urban Council, Kesbawa Urban Council and Boralasgamuwa Urban Council.
1.7 Price Collection:
The price collection for the index (Base 2021=100) has encompassed 10 price collection centers located in Peliyagoda, Maradana, Wellawatta, Dematagoda, Grandpass, Kirulapone, Nugegoda, Rathmalana, as well as two Dedicated Economic Centers, namely Narahenpita and Rathmalana. Additionally, prices are collected from Sathosa and Cargills Food City.
1.8 Method of Computation:
In the Index (Base: 2021=100) the Department of Census and Statistics (DCS) has introduced the use of the Modified Young formula to calculate the CCPI. A Young index calculated by chaining short-term price relatives to form long-term price change is known as the Modified Young formula.
1.9 Value of one Index Point:
The monthly average per household Consumption expenditure of this index which is based on the year 2021 is Rs. 91,880.34 and the value of one index point is Rs. 918.80 (Rs. 91,880.34/100).
 
NATIONAL CONSUMER PRICE INDEX :(Base 2013 = 100) for Sri Lanka
The DCS has been publishing the CCPI (Base: 2021=100) since February 2023. This index specifically covers the urban areas within the Colombo district. In addition, the DCS releases the National Consumer Price Index (NCPI), which previously had a base year of 2013=100 but has recently been updated to a new base year of 2021=100. Starting from January 2023, the revised NCPI will be published monthly with a time lag of 21 days. Serving as the official price index of the country, the NCPI incorporates weights derived from consumer spending in 2019 and employs new methodologies in accordance with international best practices.
2. Features:

The NCPI (Base 2021=100), is based on data from the HIES conducted in 2019. The HIES 2019 included all types of consumption expenditures by households and broadly represented the expenditures of all households in the country. The HIES covered 12 months during 2019 and captures seasonal expenditure patterns. The main features of the NCPI are as follows.
 
2.1 Geographic Coverage 
To better reflect international best practices, the NCPI for Sri Lanka will be disseminated on the basis of the nine provinces of Sri Lanka. Detailed data for the national level will be disseminated on a monthly basis.
2.2 Index Reference Period:

The year 2021 is the index reference period for the NCPI. The national average monthly value of the base period expenditure level on the basket of goods and services in the NCPI (Base 2021=100) is Rs. 50,728.60. This expenditure level is 57.82% greater than the index reference period expenditure level of Rs. 32,142.69 in the previous index (Base 2013=100). This increase reflects the increased expenditure due to higher income, price changes the composition of each provincial market basket and reference periods.
2.3 Weight Reference Period:

The weight reference period is the year 2019. Because it is based on HIES 2019. To reflect international recommendations and best practices, the weights refer to each item’s share in the total consumption expenditures of all Sri Lankan households. The provincial weights refer to the consumption expenditures within the province in its relative proportion to the expenditure in the whole country for each item.
2.4 Price Reference Period:

Since 2019 was not considered normal due to certain events, an average of the two years from January 2018 to December 2019 was considered as the price reference period.
2.5 Market Basket of Goods and Services:

The NCPI (Base 2021=100) basket contains 105 sub-classes of goods and services which are further categorized into 12 groups using the internationally recommended Classification of Individual Consumption According to Purpose or COICOP. The share of the food category is 39.22% while the share of the Non – food category is 60.78%.
2.6 Full-year coverage of Consumption patterns:

Expenditure weights were obtained using data on Household Expenditure in the HIES during the 12 months from January 2019 to December 2019. Therefore, it has captured the seasonal variations of consumer patterns on the whole island.
2.7 Price collection:

Prices are collected for each item in the market basket from 03 price collecting centers in each District town. Purposive sampling methods have been used to select the representative varieties for which prices are collected. For each representative variety, detailed specifications are developed that include all the price-determining characteristics. This ensures not only that a price for the same variety is collected over time, but also allows for the selection of a replacement item when needed.
2.7 Method of Computation:

In the past, the DCS used the Modified, or Two–Stage Laspeyres formula to calculate the NCPI, with the updated NCPI, the DCS has introduced the use of the Modified Young formula to calculate the NCPI.
2.9 Value of one Index Point:

The monthly average per household Consumption expenditure of this index which is based on the year 2021 is Rs. 50,728.60 and the value of one index point was Rs. 507.29 (Rs. 50,728.60/100).