Inflation stands at 6% in January after moderating electricity prices


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Prices in January are still shot. According to the INE, the IPC placed its interannual rate at 6%, five tenths below the December rate (6.5%), due to the cheaper electricity compared to January 2021. Despite this cut, it is the most expensive January since 1991. These data will be confirmed in mid-February.

With the January data, the interannual CPI chains its thirteenth consecutive positive rate, according to the advanced data. According to Statistics, in the interannual behavior of the CPI for January, the drop in electricity prices stands out, compared to the rise registered in January 2021.

For its part, core inflation, which does not include unprocessed food or energy products, increased three tenths in January, to 2.4%, which is more than three points below the general CPI rate .

In monthly rate, the CPI broke a five-month streak of increases by registering a decrease of 0.5% in January compared to December 2021, its biggest drop since last July. In the first month of 2022, the Harmonized Index of Consumer Prices placed its interannual rate at 6.1%, five tenths less than in December. For its part, the advance indicator of the IPCA fell by 0.9% in monthly rate.

Masks come in and DVDs come out

Statistics has highlighted that with the implementation of the new base methodological innovations are incorporated that improve the accuracy of the indicator, as well as changes in the composition of the shopping basket and a new weighting structure. The change of base is a process that is done every five years to renew the CPI by adapting it to changes in household consumption patterns and incorporating methodological improvements.

Thus, the CPI base 2021 incorporates new treatments for monitoring clothing prices and for processing the lack of price, and updates the list of subclasses, so that 24 subclasses disappear from the CPI calculation and two new ones are incorporated.

The most notable changes in the configuration of the basket are the incorporation of hygienic masks and the subscription to the 'online' press. Items such as the image player, the portable player or the compact-disc and the DVD, among others, disappear from the basket. As a result of these adjustments, the 2021 base CPI shopping basket happens to have 955 articles compared to 977 in the previous base.

According to Statistics, the incorporation of the liberalized electricity market in the calculation of the CPI until obtaining the information that the electricity companies have to supply with a sufficient level of detail and with the necessary technical criteria. As he specifies, "the erratic situation of the market at this time does not favor the introduction of any methodological change, which could distort the analysis of the evolution of prices throughout the year 2022 and subsequent years."

In this way, it continues to take into account the prices of the regulated market. In addition, it points out that «any methodological change introduced in the CPI may produce a bias in the measurement of the annual rates throughout the first year of its incorporation. Therefore, the objective is to incorporate the methodological changes in such a way that they affect the results of the CPI as little as possible”.

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