Consumer price index
The Consumer Price Index (CPI) measures the price fluctuations of goods and services included in household consumption in the Faroe Islands. It is an economic index used to track the price changes of goods and services purchased by typical households. Inflation occurs when the prices of goods and services increase over time.
Ever wondered what the purchasing power of 100kr in 1950 equates to in the year 2000 – or perhaps you're curious about what the value of 300kr today was in 2019 Or do you have an amount of money that needs to be adjusted according to the Consumer Price Index?
For each Consumer Price Index survey, approximately 6000 prices of goods and services are collected from around 250 enterprises and institutions. The prices of goods vary from period to period, and the weighting of each component is crucial in determining how price changes in each category affect the Consumer Price Index.
The weighting is decided based on surveys of the spending pattern of the household. The data is collected from several registers, particularly the VAT register, and from surveys of the goods imported to the country. A separate survey is conducted for the part of the consumer price index concerning housing. In some cases, information about the spending pattern of households in Denmark and Iceland are also used.
The value of the consumer price index is set at 100 on a base year, and the value of the following years shows the average per cent change compared to the basis year.
Glossary:
The index depicts the annual percent change compared to a base year, that is set to 100. the difference between two years is measured in percentage point. When comparing to the base year the change is measured in per cent.
