Inflation has been in sharp decline since Aprilto the point that in October it drilled the 3% with a strong deceleration in the areas of food and drinks. However, if the new index does indeed come out in November, “It may raise the data one point higher”a product of the change in methodology applied for measurement.
It should be noted that INDEC is under the orbit of the Executive and the administration of Javier Milei It is focused on demonstrating to the market that it will fulfill its campaign promise about lowering inflation. Hence, the organization itself stated that “there is still no institutional definition” about the debut of the new index and “Work continues to complete the technical tests during this month”.
It is that with a market betting that Inflation will continue its slowing pathdifferent financial variables improved such as country risk reductionthe calm of the financial dollars, the valuation of the Buenos Aires stock market and the rise in the international reserves of the Central Bank (BCRA). Timidly, some macroeconomic variables are also beginning to rebound, such as the liquidations of agro-export companies, which were a record since 2002, CIARA-CEC reported; while others such as the Gross Domestic Product, industry and activity continue to decline.
Luis Caputo closely monitors the movements of the INDEC. In this context, unobjectionable sources affirm that “The conditions are in place but the brake, today, is political” for the establishment of the new index. The Government does not want to disclose any number that could be understood as a inflationary acceleration and that this has a negative impact on the financial market.
INDEC dismissed a key official before the release of the new CPI
Last month, the organization dismissed the national director of Statistics and Prices, Analia Calero. As they explained at that time, the request for resignation was due to “operational issues and ways of working”.
Calero had the Consumer Price Indices Directorate under his orbit, which directs Georgina Giglioand the Production Price Indices, which leads Rodrigo Oliver.
Inflation: what will the new index be like?
The objective is to adjust the weighting of goods and services to current consumption patterns, since it is still done with a 2004 scheme. new index will be carried out based on the National Household Expenditure Survey 2017-2018.
Over the years, there have been changes in the consumption of Argentines, especially with the weighting of platforms.. Although the platforms were already used between 2017 and 2018, after the pandemic this phenomenon accelerated.
Likewise, one of the key changes will be the weighting that housing and services currently have in the CPIwhich – until now – is 8.86% at the national level, and now it would escalate to 14.5%and that in the October index doubled the average inflation (5.4% housing vs 2.7% general).
Compared to December 2023, the cost of the total basket increased 369% based on updates to transportation, electricity, natural gas and water rates, according to the latest report from Interdisciplinary Institute of Political Economy of Buenos Aires. And this will continue if rates continue to rise and the reduction of subsidies continues.
For its part, the segment of food and non-alcoholic beverageswhich until now had a weighting of 29.65%with the new index it will have a valuation of the 22.7%. It should be noted that this sector is among the prices that moderated the most.
Currently, the index went from 92,000 prices to 320,000 when it was regionalized in 2011. Now, it will rise to 500,000 priceswhile the informants will climb from 16,700 to 24,000. In addition to the index change, work is also being done on the migration of surveys from paper format -We are currently working with forms where price information is collected- to digital, with which I know that a smaller margin of error is sought.
In the segment of transportthe weighting is raised from 10.92% to the 14.3% and it is one of the prices that the Government plans to increase because it has on its agenda to reduce subsidies. For its part, health would have a lower weight, it would go from 6.82% to the 6.4%.
CommunicationFinally, it will climb from 3.8% to the 5.2% due to the interference of the consumption of internet, platforms and telephones.
Source: Ambito
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