Argentina comes clean on inflation – maybe.

Long accused of fudging its inflation data, Argentina announced a new index.

Victor R. Caivano/AP
A woman holds her Argentine pesos as she waits to pay for her groceries in Buenos Aires, Argentina, Wednesday, Feb. 12, 2014. President Cristina Fernandez's government has issued several price control programs to try to tame inflation.

In a new move to help repair its international reputation, Argentina released a revised inflation index yesterday evening after longstanding criticism that it was fudging official statistics.

Economists welcomed the amended index. But the high figure for January – a month when the government devalued the peso by 19 percent – also triggered concern: Prices soared by 3.7 percent from the month prior, officials said, the highest rate of inflation in nearly 12 years.

“Good news,” Martín Lousteau, a former economy minister who is now an opposition politician, said on Twitter. “The government has recognized the problem. Bad news: prices are increasing at an annual rate equivalent to 55 percent.”

With the government hemorrhaging foreign currency reserves, revising this data is key to its efforts to regain access to global financial markets from which it has been locked out since a $95 billion default in 2001.

Debate over the inflation rate has long raged here, with critics of the government repeatedly attacking officials for under-reporting rising prices. Most notably, the national statistics institute, INDEC, released figures in 2012 that implied a person could eat for six pesos a day, a marker that was widely ridiculed by critics. (Back then, six pesos, or about $1.35, would have bought a couple of alfajores, a traditional Argentine sweet.)

Critics also pointed to the irony of a giant banner draped at the time from the institute’s offices in downtown Buenos Aires that read “Clarín lies,” a reference to the antigovernment Clarín media group.

The institute became discredited in early 2007 (a time when President Cristina Fernández de Kirchner’s late husband and predecessor, Néstor Kirchner, was still in power) after Guillermo Moreno, the gruff former domestic trade secretary, overhauled its senior staff and meddled with the inflation index.

INDEC said inflation was just 10.9 percent last year. But a separate index published by opposition politicians said the rate exceeded 28 percent. This alternative index also put the January 2014 rate at 4.6 percent, considerably higher than the government’s 3.7 percent. The higher rate was branded a “joke” yesterday by Jorge Capitanich, the cabinet chief.

The International Monetary Fund has called on Argentina to improve its data and even censured the country a year ago for failing to comply. A spokesman for the IMF said it had taken note of the new index. Argentina is also due to revise its growth figures next month. A recession is likely to occur this year, according to Vladimir Werning, an economist at JP Morgan.

In other moves to clean up its image, Argentina has made an offer to compensate Spain’s Repsol for the 2012 expropriation of its shares in the oil company YPF; settled investment disputes at the World Bank; and re-opened negotiations with the informal Paris Club of nations over a $10 billion debt.

With prices spiking after the devaluation last month, and inflation estimated to be 45 percent this year, according to Mr. Werning, the government is also trying to confront what it calls “speculative attacks” by retailers and suppliers. It is investing large amounts of political capital in a campaign for its latest round of supermarket price freezes.

Posters were even pasted across Buenos Aires by a pro-government umbrella organization, showing pictures of the heads of leading supermarket and electronic chains. They read: “These are the ones that steal your salary.”

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to