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THE METHODOLOGY CHANGES IN THE INFLATION RATE

PRICES ROSE 0.6 PERCENT IN MAY. The CPI is again the usual controversy.

The debut of the indicator cleared the doubts of the past year and a half. The Indec gave a brief explanation of the changes. Did not say how it would have been CPI inflation to above and how they evolve food prices.

Indec If he wanted to regain credibility with the new rate of inflation, the report gave little help yesterday. Rather, it confirms the line of the last year and a half of not explaining the reasons for the changes. Since there is no substantiation of the criteria, the appearance is committed to conceal the true arbitrary price developments. The renovated CPI in May showed a rise of 0.6 percent. La Canasta food, meanwhile, fell 1.7 (see separate article). The agency did not release how much would have been the previous inflation-index would have yielded 1.2 percent, as was informed by sources close to PáginaI12 Indec, "which disappeared without splicing mechanism implemented any of the series. From now on, no more details about sixty food prices, as was done since 2002.

With this new basis, determined that the item Indec Food and beverages rose only 0.1 percent in May, down from 0.6 in food eaten at home. Within of that item, the agency recorded a 4.5 percent drop in the price of meat. In contrast, rises of 1.4 detected in dairy and eggs, 2.1 for bakery, 2.9 and 3.1 in fruit drinks. The largest increase was in the Education category, with 3.7 percent due to increases in fees in private schools, 4.3. Apparel increased 1.2 percent, while medical care was seen a jump of 1.1 and Transport and Communications, 1. For the continued rise in rents (1.5), the Housing category showed a 0.7 percent advance. So far this year, the CPI rose 4.0 percent, while in twelve months rose to 9.1.

INDEC finalized the announced change in methodology in the development of the IPC, but did not provide vital information to know how is: what is the new basket of goods and services, what are their weights, how they operate baskets mobile, which removed certain goods and services measurement and allowed other, why they took only the month of April to establish a new base in place of a period of one year and how they fit the series. This newspaper sought answers in the body, but could not even be addressed. The report released just seven veneers Indec leave all these questions.

For now, what is known is that the CPI and not record what happened to prices in food stores, restaurants, tea and condiments. In the clothing category, were left to relieve the prices of accessories (jewelry, belts, handbags), fabrics, yarns and haberdashery, clothing (tailor) and repair of clothing. Housing and Household Equipment IPC are excluded from the cost of expenses, wages of domestic service and the tariffs of plumbers, gas and other repair personnel. No further breakdown of the costs of drugs and prepaid INDEC although authorities said they will continue to measure themselves. Neither the information is broken down or Transportation Other Goods and Services, where previously contained cigarettes, toiletries and personal care services, among others. In Leisure, disappears estimate price of equipment, connections and audio services, television and computer, toys and sports goods, flowers and plants.

The basket of goods and services before these changes included 818 varieties was now at 440. The explanation given by INDEC authorities at a seminar in early May was that the historical average in Argentina was between 400 and 500 products, while the convertible was reached that figure of 818 to include imported goods whose prices were lower than local production. To broaden both the base, they said, was hidden inflation. Now, however, seeks to represent the consumption pattern of 70 percent of the company, excluding expenditure on luxuries of upper and upper middle class, like flowers of Colombia, or travel to the Caribbean.

For some analysts, the new basket was too limited, and that is even smaller than that in force in 1988, with 526 products. "With all goods and services incorporated in las últimas dos décadas, no puede ser que la canasta actual sea más reducida que la de entonces”, advirtió Ricardo Delgado, de Ecolatina. También objetó que se excluyan gastos típicos de clase media como la compra de comida en rotiserías y restaurantes, y que no se sepa qué ocurre con el precio de la nafta, en momentos en que el petróleo se encarece día a día.

El Indec actualizó la base con los datos de la Encuesta Nacional de Gastos de los Hogares de 2004/ 2005, en reemplazo de la que se venía utilizando hasta ahora, de 1995/1996, y también con información de otras fuentes, as public bodies and chambers of commerce. This was stated in a press release that he gave yesterday in a "methodological note" of just 21 lines. According to the official interpretation, this change allows a more accurate calculation of the inflation that affects the bulk of the population according to its current consumption. Now the goods represent 62 percent of the sample, whereas previously meant 53 percent, while services rose from 47 to 38 percent.

Source: Page12 / By David Cufré