CPI Update: How the Consumer Basket Change Will Impact Inflation

The National Institute of Statistics and Census ( INDEC ) is moving forward with redefining the Consumer Price Index ( CPI ) with a new expenditure base that promises to modernize inflation measurement in Argentina . Initial simulation exercises show that the impact on the results will be slight, although accuracy will be improved in a volatile economic environment.

For more than two decades, official inflation has been measured using a basket constructed from consumption data from 2004 and 2005. Despite profound changes in consumption habits, it has not been possible to update it until now.

A preliminary exercise on the new basket, based on the 2017/18 National Household Expenditure Survey (ENGHo), suggests that between December 2019 and March 2025, the cumulative difference in the CPI would be just 2.2%. By 2024, however, inflation would have been 6 percentage points higher with the new structure.

Among the main weighting adjustments, utilities, rent, expenses, and education gained share in household spending, while food, beverages, and clothing lost relative weight. This reflects the new composition of consumption in the country, although its impact on measured inflation was limited.

INDEC also confirmed that the new index will improve statistical reach, increasing the number of surveyed prices from 320,000 to 500,000 per month, and from 16,700 to 24,000 respondents nationwide.

Chief of Staff Guillermo Francos ' recent address to the Chamber of Deputies rekindled the debate over the CPI's delay. Francos confirmed that the technical development of the new index was completed in March 2025, although political approval for its implementation is still pending.

One of the main questions arose on social media, where Representative Martín Tetaz warned that the new CPI, far from softening the figures, could reflect even higher inflation in certain periods.

The National Institute of Statistics and Census (INDEC) will use the same measurement formula (Laspeyres), which involves comparing a fixed basket over time. However, experts emphasize that it is essential to choose a base year without severe distortions, such as abrupt devaluations or election years, to avoid significant statistical errors.

Since 2017, the statistical agency has adopted the Coicop Argentina methodology, which divides prices into 12 main categories, a structure that will be maintained in the new index.

Despite methodological improvements, updating the basket would not drastically alter the current inflation dynamics. The effect will be more noticeable in terms of greater precision than in a sharp change in trend.

The new CPI, based on more recent consumer habits, will better capture the impact of digital services, transportation, and other items that have gained weight in household spending since the pandemic.

Although the technical update has been completed, the implementation of the new index now depends on a political decision that has yet to be finalized. The credibility of official statistics is once again under debate, amidst economic volatility and growing social pressure.