Petrol / electricity / gas contribution
The consumer price index will be underestimated
On October 28, the government made a cabinet decision on “global economic measures to overcome high prices and achieve economic revival”.
Price controls for gasoline, electricity and gas will be implemented and it is said that this “will limit the rate of increase in consumer prices (overall) by about 1.2 points”.
The government’s explanations make it seem like this is a good thing.
However, this is a big deal in the sense that it obscures the true picture of consumer prices.
For example, the rate of increase in consumer prices is actually 2.2%, but statistics show it as 1%. In other words, consumer price statistics “lie”.
Therefore, to express the current state of the economy, it should be necessary to add up the percentage of the rate of increase in consumer prices, excluding the effects of price measures. For example, it is necessary to indicate that “statistically it is 1%, but the reality is 2.2%”.
The consumer price index is used as a criterion for the development of various policies and as an indicator of the current state of the economy.
When it does, a big problem occurs.
