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Mozambique: Organisation claims May inflation ‘wrong’
10:41 CAT | 01 Jul 2020
File photo: Lusa
The Centre for Democracy and Development, a Mozambican non-governmental organisation, said on Tuesday that the National Institute of Statistics (INE) made “an error” that resulted in the deflation of 0.6% found in May, asking the agency for clarification of the situation.
In an analysis of the Consumer Price Index (CPI) in May, the Centre for Democracy and Development (CDD) noted that the INE did not respect the “principle of quality adjustment” in the calculation of inflation, which resulted from the substitution of face-to-face education by ‘online’ or remote education, due to the suspension of classes following the imposition of the state of emergency for Covid-19.
The principle, it added, requires that a cost change imposed by the substitution of prices of the same quality, caused by an “abnormal economic situation”, should not be considered a price drop.
The CDD said that another situation that may have contributed to the INE “methodological error” in the May inflation is the way in which the institution’s inquirers directed the collection of data and information to the CPI.
“What treatment was given to the responses of individuals who said they did not pay the April school fee because they did not believe in the efficiency of distance learning?”, the CDD asked.
The NGO asked whether INE considered the lack of payment of tuition fees as a price drop.
“In the name of transparency in public management, the INE should come out and clarify the process of data collection and calculation of CPI,” the analysis reads.
On the 12 June, the CDD said the 0.6% deflation recorded in May by INE’s CPI was “misleading”.
In the analysis, the NGO said that the May CPI does not reflect the “cost of living dynamics” that Mozambique has been experiencing in recent months.
“In the current economic crisis caused by Covid-19, this deflation is not the result of an excess supply of products in the market, but of the scarcity of demand as a result of the deterioration in the purchasing power of families, especially those on low incomes,” the organisation said.
The CDD noted that products consumed by higher-income households suffered a fall in prices, but goods purchased by lower-income households experienced a sharp rise in prices.
According to INE, spending on crèches and nurseries went down 30.1%, private primary education fell 24.6%, private middle school education dropped 14.9%, private higher education was 14.3% lower and petrol fell 2.0%.
On the other hand, the price of brown sugar rose 11.5%, onions 6.5%, cooking oil 3.4%, rice 1.7% and fresh fish 0.8%.
Lusa has not yet managed to get a reaction from INE to the CDD criticisms.
DATA MANIPULATION CONCERNING THE COST OF LIVING IN MOZAMBIQUE? – #Deflation announced in May results from INE’s “error” in applying the methodology for calculating Consumer Price Index.
CDD urges #INE to come to the public and clarify this process.
Read: https://t.co/V60qpQEGC0 pic.twitter.com/LCb5cY5iDa
— CDD Moçambique (@CDD_Moz) June 30, 2020
By Tuesday (June 30), Mozambique had 889 cases of infection by the new coronavirus, 223 recoveries and six deaths.
The Covid-19 pandemic has claimed more than 505,500 lives and infected more than 10.32 million people in 196 countries and territories, according to a report by the French agency AFP.
Source: Lusa
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