In Argentina, outdated components in the consumer price index, such as newspapers and landline phones, call for a necessary update to better reflect current economic realities. Economists warn that the current index may underreport inflation, which is a pressing concern for citizens. Plans for revision have been announced but remain unfulfilled, contributing to skepticism about official data accuracy.
In Argentina, the consumer price index still includes outdated items such as newspapers, cigarettes, and landline phones. Economists are urging President Javier Milei to update this index for the first time in 20 years, replacing obsolete items with modern essentials like smartphones and streaming services. A revamped index could reflect higher inflation rates than the current estimated 2.5 percent, with local studies frequently reporting greater inflation fluctuations than national measures.
Currently, doubts about the integrity of official inflation data linger due to past government interventions, notably from a decade ago when inflation was intentionally underreported. Many citizens, including Ángel Santos, a 66-year-old building superintendent from Buenos Aires, feel that while inflation appears to be declining, day-to-day expenses continue to rise. Over 42 percent in a recent poll identified inflation as the country’s primary concern.
Labour unions assert that “real” inflation levels exceed official figures by 10 to 22 percentage points. INDEC Director Marco Lavagna previously indicated that an updated basket would be prepared soon, emphasizing caution in this significant change. This announcement followed extensive surveys aimed at ensuring accurate representation of consumer costs, yet further progress on this update has stalled.
Critics highlight a distinct lack of representation for essential services in the current index. Though food and utilities dominate the index’s weighting, services like healthcare and digital subscriptions fail to reflect evolving consumer habits. Inflation for essential services such as rent and internet has outpaced food prices, which retains a heavier weighting in the calculation.
To align with best practices in global inflation measurement, a new household expenditure survey plan was proposed, aiming to incorporate significantly more data points and reflect current consumer behavior. While Lavagna committed to enhancing the inflation calculation methodology, these plans have not materialized, leaving official inflation data potentially misaligned with reality.
The push for an updated consumer price index in Argentina highlights the discrepancies between official inflation figures and the lived experiences of citizens. With essential services increasingly impacting budgets, an updated index is crucial for accurately reflecting current economic realities. Lack of progress on this front raises concerns about transparency and the reliability of economic indicators, especially as the country heads toward crucial midterm elections. Without these necessary updates, Argentina’s inflation statistics may continue to misrepresent the actual financial pressure faced by its citizens.
Original Source: www.batimes.com.ar
