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CPI weights in light of the COVID-19 pandemic, Norway

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P1.4 Norway paper.pdf (application/pdf, 397.42 KB)

As in many other countries, the COVID-19 pandemic hit Norway full force mid-March 2020. The Norwegian government put in place comprehensive national restrictions in an effort to prevent the coronavirus to spread: social distancing, working from home, shutting down non-essential in-person services and more. This resulted in nonavailability of several services and an abrupt shift in consumer spending. This sudden shift in consumption starting March 2020 had implications for the compilation and calculation of the CPI in 2020, but also in the years to come2. The main objectives in this study has been analysis of the sudden change in consumer spending during 2020 and how it affected the Norwegian CPI. This paper documents the actions taken during 2020 and an analysis of the aftermath. The paper is structured as follows: Chapter 2 describes the challenges that occurred when the pandemic hit, with emphasis on the treatment of missing price observations for wider product3 groups related to the COVID-19 pandemic. In chapter 3 the shift in consumer spending will be analysed, and a recalculation of weights for 2020 will be presented using final annual National Accounts (NA) data for private consumption in 2020. In chapter 4 an experimental recalculated CPI will be presented using the recalculated weights, and results will be analysed. In the end some concluding remarks.