The National Institute of Statistics and Censuses (INDEC) will launch a new measurement of the Consumer Price Index (CPI) in January, featuring an updated consumption basket. This is a technically and politically significant change, not made in over 20 years, that will substantially alter the weighting of the different components that make up the official inflation rate. According to private estimates, the weight of housing, water, electricity, gas, and other fuels will increase by 5.1 percentage points, to represent 14.5% of the total basket. Meanwhile, food and beverages, while still the largest individual component, will see their share reduced: from the current 27% to 22.7%. One of the most significant changes will occur in communications. Services will gain greater prominence, while goods will lose relative weight. The transport sector, which includes both vehicle purchase and maintenance as well as bus, train, and subway fares, will rise to 14.3%, an increase of 3.3 points from the scheme in effect until December. The new methodology is designed to reflect the current spending of households, which has changed dramatically over the last two decades. For example, spending on home internet, cell phone services, digital services, and streaming platforms is now much higher, whereas 20 years ago these expenses were marginal or non-existent. In contrast, other categories will lose relevance. Clothing and footwear will fall from around 10% to 6.8%, restaurants and hotels will drop from 9% to 6.6%, and alcoholic beverages and tobacco will reduce their share from 3.5% to 2% of the total index. An exercise by the consultancy Equilibra estimated that if this methodology had been applied in 2025, annual inflation would have been 32.2%, compared to the officially reported 31.5%. To correct this discrepancy, the statistical body conducted a national household expenditure survey between 2017 and 2018, allowing it to recalculate how much families now spend on food, utilities, transportation, telecommunications, health, education, and other categories that have gained centrality in the last two decades. Broadly speaking, since the change in government, cumulative inflation with the new basket would have been 270%, instead of the 259% recorded with the current measurement, which shows that the change does not drastically alter the trend, but it does adjust the picture of the real impact on households. INDEC will have to define two key issues in the coming weeks: the exact final weighting of each category and whether it will carry out a retrospective reconstruction of the inflation series to allow for homogeneous comparisons. In the meantime, the new CPI anticipates a scenario where increases in tariffs, transportation, and internet will have a greater impact on the monthly figure, while increases in food, clothing, or footwear will impact the general index relatively less.
