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Measuring Core Inflation in SN

Measuring Core Inflation in SN. Inflation versus Core Inflation Monetary policy – operational target Decide and Implement Comparisons. Inflation vs Core Inflation. Short term – strong fluctuations Long term – different price trends. Operational Target.

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Measuring Core Inflation in SN

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  1. Measuring Core Inflation in SN Inflation versus Core Inflation Monetary policy – operational target Decide and Implement Comparisons

  2. Inflation vs Core Inflation • Short term – strong fluctuations • Long term – different price trends

  3. Operational Target • The operational target of monetary policy shall be annual consumer price inflation of approximately 2.5 per cent over time. • In general, the direct effects on consumer prices resulting from changes in • interest rates, • taxes, • excise duties and • extraordinary, temporary disturbances shall not be taken into account.

  4. Extraordinary temporary disturbances?

  5. Taxes and Duties • Taxes - adjusted in CPI-AT

  6. Taxes and Duties CPI CPI-AT

  7. Energy goods in CPI • Energy goods not so dominant, but …

  8. Energy goods in CPI • Energy goods not so dominant, but … • Short term – strongly fluctuating 12-month change

  9. Energy goods in CPI • Energy goods not so dominant, but … • Long term – higher price trend Index (1998=100)

  10. CPI adjusted for tax changes and excluding energy products

  11. Comparison with other measures of core inflation

  12. Questions or comments?

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