17 July 2024
Latest index value and inflation rates for Q2 2024
The Statistics Office has released new estimates of the Retail Price Index (RPI) and the annual inflation rate for Q2, 2024. For the second quarter of 2024 the RPI has been measured at 117.3; in Q2 2023 the RPI was 115.3, resulting in an annual inflation rate of 1.8%. This rate is unchanged from the previous annual inflation rate of Q1 2024.
Trends in price changes
The index uses 203 representative items to measure price changes in nine different major categories of household spending. Since a year ago, 85 items increased in price, 39 items decreased in price, and the price of 79 items remained unchanged. All categories saw an increase in price since a year ago (Q2 2023), apart from the Communications category, which saw a significant drop in price due to changes in the internet access tariffs introduced by the telecommunications provider (Sure) in October last year. This price drop continues to partly offset price increases in other categories, when measured over a one year period.
Price changes in both the UK and South Africa have a strong impact on prices on St Helena, since the majority of goods imported are purchased in those two countries. In May 2024, annual consumer price inflation in the UK was measured at 2.0% (UK Office for National Statistics), down from 2.3% in April, and in South Africa it was measured at 5.2% (Statistics South Africa), unchanged from April 2024. Changes in the value of the Rand compared to the Pound can have a large effect on the price of goods purchased in South Africa, and during the first six months of 2024 the Pound averaged around 23.7 Rand, which is a 5% increase compared to the same period in 2023, when it was 22.5. This change tends to counteract the effect of price inflation in South Africa on the final shop-floor prices on St Helena.
Price changes by category
The categories which contributed the most to the upward pressure in the 1.8% annual inflation rate are Household Energy, Housing and Transport. In January 2024 Connect Saint Helena Ltd introduced a revised Utilities tariff, with an increase in charges for both water and electricity; further price increases have been introduced in July 2024, but these will only be measured in the next quarter (Q3 2024). Over the last twelve months the Housing category has been affected by increases in the price of water, the price of building materials and maintenance services, and the Transport category has risen mostly due to increases in prices of tyres, delivery charges, and petrol and diesel.
The quarterly change in the RPI was 0.3% (i.e. Q2 2024 compared to Q1 2024). The three categories with the highest increases over the last quarter were Food (1.0% increase on average), Transport (0.8% increase on average), and Miscellaneous Goods and Services (0.6% change on average). There were price decreases in Household Goods and Services (-1.0% change on average) and Clothing (-12.0% change on average). Clothing prices are relatively volatile as they are often affected in the short term by store stock changes, but clothing has a very low weight in the shopping basket (1.1%) so these changes have a relatively small impact on the overall average inflation rate.
Frequently Asked Questions
What is price inflation and how is it measured?
Price inflation is the change in the average prices of goods and services over time. The rate of price inflation is calculated from the change in the RPI, which is the official measure of the average change in the prices of goods and services paid by consumers. The RPI is estimated each quarter, i.e. once every three months, and the rate of price inflation is usually quoted on an annual basis; that is, comparing price changes over a 12-month period. Prices and the RPI tend to go up, but they can occasionally go down – which is known as price deflation.
The RPI is a statistical measure of the change in retail prices on St Helena; an increase in the RPI means that, on average, prices have gone up since the last time they were measured, and a decrease in the RPI means that, on average, prices have fallen. The annual change in the RPI is called the annual inflation rate, and is the usual measure of the change in prices in an economy. The RPI is an average measure: if it goes up, it does not mean that all prices have gone up, and similarly, if it goes down, it does not mean that all prices have fallen.
Why do we measure inflation?
An accurate measure of price inflation helps understand the extent and nature of the impact of price changes on the government, businesses, households and individuals. Inflation rates are often used in budgeting and accounting processes so that costs can be adjusted for the effect of price changes.
How is the RPI calculated?
The basis for the RPI is the average weekly cost of goods and services purchased by households on St Helena, sometimes called the RPI ‘shopping basket’. Items which households purchase more of, such as food, have the biggest share of the RPI basket. The current RPI uses a basket from the latest Household Expenditure Survey in 2017; prices representing the groups of items in the basket are collected every quarter, and the price of the total basket is compared to the price in the baseline period, the first quarter of 2018. By convention, the value of the basket in the baseline period is scaled to 100, and the RPI values are quoted in relation to that baseline. For example, an RPI value of 120 means that average prices have increased by 20 per cent compared to those recorded in the baseline period.
Composition of average household weekly expenditure (Q1 2018 RPI ‘Shopping Basket’)
What happens when items are not available?
If an item of the ‘basket’ is not available then either the previous price will be carried forward from the previous quarter, or a suitable substitute item will be identified and an adjustment calculation made. Care is taken to ensure that this substitute item represents the item category and that it does not introduce error to the measurement of the RPI. An important principle is that price changes should reflect actual price increases and decreases, and not changes in the quality of items.
Where can I get the data?
For detailed tables of the RPI and annual inflation rates from 1994 onwards, please visit: https://www.sainthelena.gov.sh/st-helena/statistics/the-economy and download the ‘inflation’ data file. Other datasets, bulletins and reports are also available on our website: www.sainthelena.gov.sh/statistics.
Have more questions or comments?
Please get in touch. We are Neil Fantom, Statistical Commissioner, Kelly Clingham and Justine Joshua, Senior Statistical Assistants and Courtney O’Dean, Statistics Assistant. You can find us in person at the Statistics Office on the top floor of the Post Office, Jamestown. You can also contact us by telephone on our direct line through 22138. If calling from overseas, the international dialling code for St Helena is +290. Our general office e-mail address is statistics@sainthelena.gov.sh, or you can email team members directly (the format is firstname.lastname@sainthelena.gov.sh).