Argentina 'hiding' high inflation

Critics accuse the country's government of massaging official inflation figures.

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    Argentines say the price of food has doubled

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    Watch Lucia Newman's full report here

    Argentina's government has been accused of masking inflation and that it blatantly tampered with official price index figures.

      

    Luciana Diaz Frers from the centre for public policy implementation said: "The consumers, entrepreneurs and the public sector – everybody – is somehow affected by these figures.

    "They have to be taken seriously, they cannot be accommodated to the needs of the government otherwise they will lose their credibility."

    Investigation

     

    Argentina's commerce minister is under investigation, accused of ordering the National Statistics Office to dramatically alter inflation figures, from 3.6 to nearly zero per cent, in order to favour the government in this election year.

     

    The government claims overall inflation is less than 10 per cent consumers find it hard to believe.

     

    One shopper said: "The price of absolutely everything has doubled. A year ago, this cost exactly half of what it cost me today."

      

    Argentina is still trying to recover investor confidence after its world record debt default in 2002.

     

    On the surface its economy is stellar: eight per cent sustained growth in the last four years; exports soaring; construction, too.

    Economic nightmare

      

    But the price of clothing has skyrocketed; rents are up 60 per cent, private schools 20 per cent.

    Government price controls to try to contain inflation have not worked, and instead have led to shortages of key consumer goods.

     

    Susana Adrada, president of the consumer education centre, said: "Inflation always affects the lower income groups most, because they use more than 60 per cent of their salaries for food, and that’s what’s gone up most."

     

    Critics say the government must increase production incentives, release price and currency controls and allow the market to stabilise, or Argentina’s latest economic miracle could turn into yet another Argentine economic nightmare.

    SOURCE: Al Jazeera


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