MercoPress. South Atlantic News Agency
Price Index new weightings should help Brazil with inflation target and rate cuts
Brazil’s statistics agency released Monday new weightings for items in its benchmark IPCA price index, adapted to changing family consumption patterns, which should help policymakers fine-tune complying with targets and keep cutting interest rates. Read full article
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Disclaimer & comment rulesWhat this means is that the Brazilian govt can cook the books to hide inflation. Their southern neighbor CFK has lots of experience in this. If you dare say that inflation figures are higher than what the govt says then you face fines or perhaps a visit from a Peronist thug.
Nov 29th, 2011 - 07:27 pm - Link - Report abuse 0All goverments should amend their statistic systems to suit the current situation in their country. Brasil seems to have done this properly 'because they are based on a survey that shows adjustments in consumers’ spending patterns'.
Nov 29th, 2011 - 07:35 pm - Link - Report abuse 0What Argentina does, time and time again, is cook the figures to suit themselves. They lie to themselves and their people. Liers always get caught out in the end.
Brasil is entirely RIGHT to keep abreast of the monthly/yearly buying patterns to help its weightings and inflation figure.
Nov 30th, 2011 - 01:04 pm - Link - Report abuse 0All developed nations do this,
the only thing that I would question is - is the five year review frequency too long in these fast changing times?
If food prices increase by a large percentage and it's cost is 20% of the family income for the lowest income group and 5% of the top income group,I wonder how gvt's adjust for that so that the impact of inflation is an accurate picture of it's impact on the majority?and is the answer one that underlines the value of the measure as a socially valid measure or a financially useful statistic
Nov 30th, 2011 - 10:17 pm - Link - Report abuse 0#4 The reality is that they would ignore the high income earners.
Dec 01st, 2011 - 01:03 pm - Link - Report abuse 0In statistical terms, adjusting for samples of 5% or less in a macroeconomic sense is fraught with potential problems.
Most important are the other sample sizes such as the 'middle class' in earnings terms vs the poor people. Getting the rations wrong at this point would risk disenfranchising the poor and risking social unrest. No government in its right mind would want to risk that.
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