The State Statistics Service of Ukraine promised to change the basket of goods since January 1, 2012. The current list of 269 items will be complemented with 29 new products. We remind our readers that the set of goods called by the economists the “basket of goods” is revised once in five years in order to take account of the real people’s expenses for the most needed goods and services. The monthly minimum of bread, milk, eggs, meat and other foods in the Ukrainians’ diet, etc. is calculated in it.
According to director of Statistics Department of the State Statistics Service of Ukraine Olha Balabukha, the new list of foods and services will be complemented by the rent, medical services, vehicle insurance, house keeping services, etc. Besides, they are planning to add some technical equipment such as lap-top computers, USB-drives, etc. However, they do not precise how much the basket of goods will grow.
The State Statistics Service explains that due to better estimation of the set of goods, in particular, adding new goods and service people really spend their money on, consumer price index will be calculated more accurately. This factor is used to index cash income of the people. That is why the more accurate the set of goods is, the more accurate are the consumer price index and the indexation the people receive. The Day asked Doctor of Economics, President of the Market Reforms Center and former Ukrainian minister of economy Volodymyr LANOVY to assess how this initiative will influence the Ukrainians’ life:
“The extension of the basket of goods is a positive step. It will help to see a more balanced and objective information about the most popular products and services the Ukrainians use. However, after it is extended it cannot be considered complete. It is unclear, how much people will spend on separate goods and services. For example, some people eat more meat, some people use telecommunication services and others do not use them. Some people might need a USB-drive but not all of them. That is why I think that the basket of goods will be more realistic if it is calculated for different social groups: retirees need certain goods and services and businesspeople need other ones. I mean that the basket of goods should be differentiated for various social groups considering the specific way of their life. It would be good to create a separate basket of goods for the countryside since today it reflects the ‘average temperature in the hospital.’ For example, rubbers are mainly bought in the countryside, however, the basket of goods index is calculated for the whole Ukraine including the cities.
“Today the basket of goods which is the minimum the people need is much lower than the minimal pensions, wages and social payments. However, according to the law, the level of people’s incomes cannot be below the basket of goods. That is why it should be revised. For example, the analysis of the foods at the markets, in public catering demonstrates that the basket of goods in this group yearly grows by 20 to 25 percent. The fact that it is not revised means that the minimum buying power of the people is artificially decreased.”
