Argentina’s consumer price index is criticized for including outdated items, prompting calls for reform ahead of elections. Economists believe a revised index would show higher inflation rates than the reported 2.5%. While Milei’s administration has touted progress in reducing inflation, many citizens feel otherwise. Essential services remain underrepresented in the index, contributing to growing skepticism about official inflation data.
Argentina’s consumer price index (CPI) has remained largely unchanged for two decades, retaining outdated items such as newspapers, cigarettes, and landline phones. Calls for President Javier Milei to update the index have intensified, suggesting a need to replace obsolete items with current staples like smartphones and streaming services. Economists believe that a revised index would show significantly higher inflation rates than the reported 2.5%.
Milei’s government faces potential challenges if the CPI is updated, especially as midterm elections approach. Official data indicates annual inflation has decreased from 276.2% to 66.9% in February, yet many citizens feel that prices continue to rise faster than reported. Ángel Santos, a resident of Buenos Aires, expressed frustration stating, “Inflation is going down, but prices keep rising.”
A recent poll indicates inflation remains a significant concern for the Argentine populace, with 42% identifying it as the country’s foremost issue. Labor unions claim that the reality of inflation may exceed official figures by 10 to 22 percentage points. INDEC Director Marco Lavagna announced plans to update the CPI basket but stated, “it is not going to change that much.”
Key criticisms of the current index revolve around the low representation of services. Essential services such as healthcare and education do not reflect everyday spending, as food continues to dominate in the index. Economist Mariana González noted that while the purchase power improved over the years, Argentines are now consuming more services relative to food.
Prices for services like rental properties and mobile phone service have significantly outpaced food prices. The methodology for the CPI is also due for a revision to follow international best practices, incorporating a larger dataset of prices and informants. Despite promises for change, the updated CPI project has yet to advance, leaving Argentina’s official inflation figures disconnected from the population’s reality.
In summary, the persistence of outdated items in Argentina’s consumer price index has led to calls for urgent reform by President Milei’s administration. While government data reports decreasing inflation, citizens’ experiences suggest rising costs in essential services, contributing to skepticism about official statistics. There is an imperative for a revamped index that reflects current consumption habits, or else Argentina’s inflation data may continue to misrepresent economic conditions.
Original Source: www.batimes.com.ar
