ISSN: 1391 - 0531
Sunday, June 24, 2007
Vol. 42 - No 04
Financial Times  

Inflation: Who knows what it is?

Perhaps the most interesting observation from a Central Bank (CB) survey on inflation expectations is that most of the general public doesn’t understand inflation or know what it is. The CB has been conducting this monthly survey since January 2007 with the objective of obtaining feedback from key economic agents about present and future expectations of inflation in the economy. The respondents are separated into two groups, those being 'investors' and the 'household sector.' Investors include heads of companies, bank managers, economists, and other professionals 'who know the concept of inflation', a CB official said.

The household sector is where the lack of understanding and information is prevalent.

The monthly survey results are submitted to the CB's Monetary Policy Committee. When it comes to investors, the CB emails the survey to a selected group of individuals. However, ascertaining data from households is done in two different ways. One is through telephone interviews where numbers are randomly chosen from the phone book. The other is through face to face interviews in selected areas in and around Colombo even though the CB Statistics Department is contemplating venturing outside the capital. The main problem the surveyors encounter when interviewing households is getting past people's skepticism about the legitimacy of the survey and the reasons the information is being gathered.

(NG)

 

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