Average inflation in Papua New Guinea

Measures the change in prices of a representative basket of goods and services bought by Papua New Guinean households. Compiled by the National Statistical Office (NSO), it is the country's main gauge of inflation.

Based on a price survey across the main urban centres, typically compiled quarterly. Each item is weighted by its share of household spending and aggregated into an index with a base year (index 100). Average annual inflation averages the year-on-year rates.

It is a central reference for the Bank of Papua New Guinea when setting rates and managing the kina. High inflation pushes rates higher and erodes households' purchasing power.

It only captures the defined basket, not the whole economy. It is highly sensitive to food and imported goods given the country's exchange-rate exposure; its quarterly frequency and urban coverage limit reading the underlying trend.