Pascal Seiler, 16 July 2020

Sharp changes in consumer expenditure may bias inflation during the Covid-19 pandemic. This column measures the effects of the Covid-induced weighting bias on the Swiss consumer price index by quantifying the changes in consumer spending using public data from debit card transactions, updating CPI basket weights and constructing an alternative ‘Covid price index’. There is evidence that Covid inflation was higher during the lockdown than suggested by CPI inflation. Persistent ‘low-touch’ consumer behaviour may lead to inflation being underestimated through to the end of 2020.

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