Somalia Launches a Modern, Nationwide CPI System

 Somalia Launches a Modern, Nationwide CPI System

In May 2025, Somalia took a major step toward economic modernization by launching its first nationally representative Consumer Price Index (CPI). This shift, led by the National Bureau of Statistics, replaces the older system that focused only on Mogadishu, and now reflects price changes across all federal states.

The CPI is a crucial tool that tracks how the prices of everyday goods and services change over time. It's essential for shaping government policies, adjusting salaries and pensions, guiding business decisions, and helping families manage their budgets. With a more inclusive CPI, Somalia can now make better-informed decisions based on real national data.

What makes this new CPI different is its modern approach. It uses updated household consumption data from 2022, follows international standards (COICOP 2018), and replaces paper-based surveys with digital data collection tools. This ensures more accurate, faster, and transparent reporting.

The first results, covering March 2025, revealed a national inflation rate of 3.9%. Key price increases were seen in transport (+8.0%), restaurants (+6.5%), and clothing (+6.3%). Meanwhile, prices dropped in areas like communication (–7.9%) and tobacco (–2.7%). There were also notable regional differences—Jubaland experienced the highest inflation at 7.7%, while Puntland saw a slight deflation of –0.7%.

Looking ahead, Somalia plans to publish CPI data monthly, introduce new indexes like the Producer Price Index (PPI), and break down prices by urban and rural areas. These changes will strengthen economic planning, improve transparency, and support long-term development.

With this launch, Somalia is not just tracking inflation—it’s building a smarter, more stable economic future.