Inflation and covid-19: An exercise for Colombia

Abstract

The covid-19 pandemic distorted the pattern of household consumption. Consequently, the official fixed basket cpi could be measuring inaccurately the evolution of inflation. The exercise presented in this document, was to update the weighting structure of the basket with alternative information on consumption and household expenditures to explore how the inflation calculations could be affected during the pandemic period. The results indicate that cpi would be increasing faster than the fixed basket cpi measures reveals.