Fynsa
Last week I wrote about the surprise of the March CPI, which brought year-on-year inflation to stand at 9.4%. This occurred in a global context in which prices continue to rise steadily, but in which local conditions have exacerbated the phenomenon. Also, in a previous column, I told you about the construction of the CPI basket and how it represents an average individual in our economy, but that does not mean that it represents each of us individually. Well, this time, I want to bring the debate down to something that the media has been asking me about constantly, and that is the prices of certain specific products, with a special focus on oil (oil in 2022 is what avocados were in 2021). However, I don't want to just stick to the classic graph of the products that rise (or fall) the most, but I want to show you the ones that have had the greatest impact on people's pockets and how it reaffirms that inflation is the worst tax for those with fewer resources.
First, I'm going to talk about inflation from the very nature of the concept, which is the sustained increase in prices in an economy over a given period. In other words, I am not going to comment on the one-off increase in goods and services during March, as these are often contaminated by seasonality, methodological issues, or discrete variations that do not necessarily represent a trend. Thus, in this vein, what interests us, then, is to see which goods and services have had the greatest impact on the 9.4% increase in prices in the economy over twelve months.
Thus, the product that has had the greatest impact on the CPI in one year is gasoline. In fact, it accounts for 0.8 percentage points of the total, "thanks" to its increase of almost 31%. In second place, within the same division, is new cars, which, due to a 20.2% increase, accounts for just over 0.6 pp in the aggregate indicator (its relative, used cars, also rose 20%, but its impact only reached 0.05 pp). However, unlike the former, it is not as if you are buying a new car every month, so in your perception of inflation, this type of goods may not necessarily mean a greater monetary outlay. However, continuing with the list, we find that among the 20 products that have had the greatest impact this year, 15 can be classified as everyday items (in addition to gasoline, meat, bread, gas, drinking water, etc.). In case you have any doubts, oil appears only in 22nd place, with an impact of 0.09 percentage points.
Another way to look at it is to compare the behavior of some consumer baskets versus the aggregate indicator. consumption baskets versus the aggregate indicator. Thus, considering a methodology of based on recommendations from the based on recommendations from the Ministry of Health, we constructed the basic basket and the healthy basket, in addition to the food basket that is published regularly. The results are not very encouraging, considering that the basic basket shows an increase of 13.6% in one year, more than 4 points above the aggregate indicator. To make matters worse, the healthy basket has risen 14.1% in the same period, while the basket that groups all foods together has risen by 13.1%. It is true that not all of each household's budget is spent on these baskets, but the higher the percentage of income spent on them, the higher the perception of inflation will be. Now, it comes as no surprise that households that spend relatively more on these products are those with lower incomes. This directly impacts purchasing power, which is ultimately what matters, reducing their well-being. It is curious that many of the measures, which I have no doubt were well-intentioned, ended up affecting those they were intended to help. This usually happens when people do not want to listen and the decision-makers hide behind their own interests rather than those they represent, who are generally not the ones who shout the loudest.
At a crucial moment in our history, it is not too late to listen and remember the efforts made in the 1990s to defeat inflation, the tax that hits where it hurts most.
