Inflation starts strong in 2022, diminishing the purchasing power and the standard of living of the population

By Jerom Bolt
The annual inflation rate rose to 8.35% in January 2022, from 8.19% in December 2021, according to data released Monday by the National Institute of Statistics (INS). Non-food goods increased by 10.18%, food by 7.24%, and services by 5.66%.
This greatly diminishes the purchasing power of the population, despite the increase of pensions by 10% from January 2022, but also of all citizens employed in the private or public sector.
“Consumer prices in January 2022, compared to December 2021, increased by 1.5%. The annual inflation rate in January 2022 compared to January 2021 is 8.4%. The average rate of consumer prices in recent 12 months (January 2022 – February 2021) compared to the previous 12 months (January 2021 – February 2020) is 5.5% “, it is said in a communiqué of INS.
NBR forecasts 11.2% inflation at the end of the second quarter of 2022, 10.2% at the end of the third quarter of this year and 9.6% at the end of the fourth quarter of 2022, according to the Quarterly Inflation Report published at the end of the week past.
“The projected trajectory of the annual CPI inflation rate is substantially influenced by the future evolution of energy product prices, burdened by major uncertainties. electricity and natural gas for the population, according to the legislation in force at the time of publication of this Report, the annual inflation rate will gradually decelerate until the first quarter of 2023, respectively abruptly in April 2023, amid a broad favorable base effect The projected values ​​are 9.6% in December 2022 and 3.2% in December 2023, respectively, with a significant direct contribution of 6.3 percentage points to the dynamics of energy prices (fuels, electricity, natural gas). by the end of this year, “the report said.
According to the quoted source, the adjusted annual CORE2 inflation rate continues to receive short-term increases in production costs, being projected to increase during the first quarter of 2022. With the gradual dissipation of these pressures from supply factors, under the influence of determinants fundamentally, the upward trend of the indicator will be reversed later, being forecast a gradual deceleration, with a return to the upper edge of the target range in the first quarter of 2023.
The balance of risks in relation to the annual inflation rate is estimated to be slightly inclined in the direction of deviations upwards from the trajectory described in the baseline scenario. In the current context, appreciable sources of uncertainty continue to come from future developments in the energy and health crisis.