The year is less than two weeks old, but inflation has already dropped below ten percent. And this is cause for celebration according to economist Edin Mujagic. “CBS informed us this morning that the magic figure for December is 9.6 percent, and we should be happy with those kinds of percentages these days.”
Provided that the inflation data is calculated correctly, Mujagic points out. The many methods of calculation can be considered excessive, she thinks. “It’s only okay if you get a message from CBS that it’s managed to find a better way to measure inflation,” she says. “But the fact that inflation is always lower after a new measurement method causes distrust in many people.”
According to Mujagic, it is currently impossible to properly look back on previously calculated inflation rates, due to inconsistency in calculation methods. “If they start calculating inflation better from the summer of this year, the figures for the last few years won’t be recalculated,” he says. ‘It’s very valuable to economists if there are long series, because you can do something with them. So you can discover models and trends.’
Bad news
Although he is satisfied with the new calculation methods, he calls it bad news that the series of inflation calculations according to the current method is becoming very short. “But ultimately the calculation method is very important,” he continues. “You want to try to match actual inflation as closely as possible.”
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
