Colombian CPI Methodology by Household Income Levels

Design methodology of the Colombian CPI by household income-level Juan Daniel Oviedo Director

I N F O R M A C I N P A R A T O D O S Summary 1 2 Colombian CPI history Update CPI (based December 2018 = 100) by household income-level

I N F O R M A C I N P A R A T O D O S 1. Colombian CPI history The Colombian CPI has a long tradition in the production and dissemination of results based on the classification of households according to their expenditure structure: Colombian CPI Segmentation criterion Term Income level Weight Collection No. 1 2 3 4 1954 -1978 Employees Workers Labor category Each CPC by labor category were calculated with all sources 1979 - 1988 1989 - 1998 Income level (uppder level income households were excluded) Lower Half Each CPI sources were clasificated according to the housesholds socioeconomic stratum around. (Houseshold would buy goods next to own neighborhood) 1999 - 2008 2009 - 2018 Lower Half Upper Income level structure A Vulnerability Approach to the Definition of the Middle Class Each CPC were calculated with all sources (except in the case of rents, water, electricity and gas*) Middle classUpper 2019 - Today Poor Vulnerable income

I N F O R M A C I N P A R A T O D O S 2.Update CPI (based December 2018 = 100) by household income-level Colombian CPI Weight by income level* COICOP Division Poor Vulnerable Middle class Upper income Total Food and non-alcoholic beverages 23,78 22,24 15,80 8,16 15,05 Alcoholic beverages, tobacco 1,82 1,88 1,72 1,53 1,70 Clothing and footwear 3,30 3,50 3,91 4,49 3,98 Housing, water, electricity, gas and other fuels 40,17 36,33 33,13 30,44 33,12 Furnishings household equipment 2,97 3,07 3,75 5,99 4,19 Health 1,51 1,40 1,52 2,34 1,71 Transport 7,08 10,07 13,00 15,12 12,93 Communication 2,66 3,25 4,58 4,56 4,33 Recreation and culture 2,61 2,89 3,46 5,19 3,79 Education 1,64 1,74 4,29 6,55 4,41 Restaurants and hotels 7,23 8,17 9,48 10,31 9,43 Miscellaneous goods and services 5,23 5,46 5,35 5,32 5,36 *Urban areas coverage in 56 municipalities

I N F O R M A C I N P A R A T O D O S 2.Update CPI (based December 2018 = 100) by household income-level Some divisions Colombian CPI Weight by income level* Middle class Division Some clases Poor Vulnerable Upper income Total Observation Motor cars 0,02 0,43 2,23 5,21 2,65 Fuels and lubricants for personal transport equipment 1,23 2,19 3,00 3,44 2,94 Petroleum price shock Transport Passenger transport by road 5,24 6,56 5,88 3,17 5,29 Regulated prices Restaurants, caf s and the like 7,20 8,12 9,31 9,47 9,12 Restaurants and hotels Canteens 0,02 0,01 0,04 0,22 0,08 Accommodation services 0,01 0,03 0,12 0,61 0,23

I N F O R M A C I N P A R A T O D O S Methodology design All households in every municipalities, were classified by daily per capita income: Less than 4 PPP dollars (2017): Poor Between 4 and less than 10 PPP dollars (2017): Vulnerable Between 11 and less than 50 PPP dollars (2017): Middle class Value greater than 50 PPP dollars (2017): Upper income

I N F O R M A C I N P A R A T O D O S Results. Colombian CPI by income levels 12-month percentage change (2018-Abril 2021) 5.00 4.50 4.00 Percentage change % 3.50 3.00 2.28 2.50 2.09 2.07 2.00 1.50 1.45 Poor Upper income Vulnerable Middle class Total 1.00 0.50 October October October June August June August June August April April April April March Mayo March Mayo March Mayo March July July July February September February September February September February January January January January November December November December November December 2018 2019 2020 2021

I N F O R M A C I N P A R A T O D O S Results CPI April 2021 Results-12-month percentage change % CPI April 2021 Results-12-month contribution Middle class Upper income Middle class Upper income COICOP Division Poor Vulnerable Total COICOP Division Poor Vulnerable Total Food and non-alcoholic beverages 0,61 0,72 0,71 0,40 0,64 Food and non-alcoholic beverages 2,42 3,07 4,27 4,65 3,98 Alcoholic beverages, tobacco 0,06 0,05 0,05 0,04 0,05 Alcoholic beverages, tobacco 3,14 2,86 2,84 2,75 2,83 Clothing and footwear Housing, water, electricity, gas and other fuels Furnishings household equipment -0,03 -0,04 -0,07 -0,22 -0,10 Clothing and footwear -0,97 -1,05 -1,94 -5,05 -2,68 0,89 0,84 0,72 0,54 0,70 Housing, water, electricity, gas and other fuels 2,26 2,35 2,19 1,78 2,13 -0,07 -0,05 -0,03 0,05 -0,01 Health 0,07 0,07 0,07 0,09 0,07 Furnishings household equipment -2,28 -1,64 -0,80 0,87 -0,31 Transport 0,31 0,36 0,47 0,46 0,44 Health 4,70 4,93 4,32 3,97 4,28 Communication 0,02 0,02 0,02 0,00 0,02 Transport 4,42 3,60 3,66 3,15 3,52 Recreation and culture 0,02 0,04 0,02 -0,09 -0,01 Communication 0,84 0,77 0,44 0,03 0,37 Education -0,20 -0,16 -0,37 -0,34 -0,33 Recreation and culture 0,91 1,43 0,54 -1,84 -0,16 Restaurants and hotels 0,30 0,33 0,38 0,35 0,36 Education -11,50 -9,02 -8,28 -4,97 -7,12 Miscellaneous goods and services 0,10 0,10 0,11 0,15 0,12 Restaurants and hotels 4,25 4,02 4,00 3,37 3,83 Total 2,09 2,28 2,07 1,45 1,95 Miscellaneous goods and services 1,89 1,82 2,16 2,85 2,27

I N F O R M A C I N P A R A T O D O S Users The results of the CPI according to income level, for the first two aggregations (for poor and vulnerable groups) are used as a decision- making tool to define the increase in the Minimum Wage. The results of the index for those of middle- income households (third aggregation) to evolve the items in the financial statements

Design methodology of the Colombian CPI by household income-level Juan Daniel Oviedo Director