Direcção Nacional de Estatística

The Consumer Price Index (CPI) measures the rate of changes over the time in the prices of consumer goods and services, purchased or otherwise acquired by households, which households use directly, or indirectly, to satisfy their own needs and wants.¹

In practice, most CPIs are calculated as weighted averages of the percentage price changes for a specified set, or ‘‘basket’’, of consumer products, the weights reflecting their relative importance in household consumption in some period. These consumer products and services are classified according to the Classification of Individual Consumption according to Purpose (COICOP) consisting of a total of 12 sections.

The Timor-Leste’s CPI basket covers a wide range of goods and services covering the first 10 Sections COICOP re-arranged in the eight groups (see table below).

Each group is divided into sub-groups, in a total of 30 sub-groups of products and services. Each group and sub-group has its own weight or measure of relative importance in the consumption of Timorese households. In the calculation of the CPI the National Statistics Directorate applies a variable weights approach, in which the weights of the seasonal products change monthly according to changes in the quantities consumed during the different months of the weight reference period derived from 2001 Timor-Leste Standard of Living Survey (TLSLS).
The 2008 annual average weights for the groups of products in the CPI were as follows:

Sections / Groups		Weights
No.	Description	In percent
1.	Food and Non-Alcoholic Beverages	60.1
2.	Alcohol Beverages and Tobacco	4.1
3.	Clothing and Footwear	7.7
4.	Housing, water, electricity and fuels	10.2
5.	Household equipment and routine household maintenance	6.0
6.	Health	4.2
7.	Recreation and Education	2.8
8.	Transport and Communication	4.8
Total		100

The actual CPI has as base the medium prices of December of 2001, the one that the index 100 was attributed.
Each month the National Statistics Directorate collects prices in the Dili district for all the CPI items, originating the CPI-Dili. Prices are collected quarterly for all items in some of other districts throughout Timor-Leste (CPI-Timor-Leste). The measure of the interim monthly movements for each item outside the Dili district is then estimated using the corresponding Dili monthly item movement as an indicator series.