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Government food price claims baffle Argentines
2013-01-17 15:40:59 | (0 Comments)
Six pesos a day. That's all it takes to eat in Argentina, at least according to the government.
But on the streets of the capital, 6 pesos doesn't stretch beyond a pack of chewing gum, or a cup of yoghurt, or a single "alfajor" — the country's traditional caramel-and-chocolate cookies.
They're tasty, but hardly provide what the government calls the "minimum calories and proteins needed to sustain a moderately active adult."
As the International Monetary Fund moved closer today to sanctioning Argentina for inaccurate inflation data, The Associated Press checked prices in Buenos Aires, and couldn't find a can of soda for less than 8 pesos.
Even a ham and cheese sandwich cost 13 pesos at a downtown kiosk. That's without lettuce or tomato. Food purchased at supermarkets is more economical of course, but even there, 6 pesos bought just one can of green peas, or a pound of raw rice — hardly enough for a complete and healthy diet.
The official inflation rate is based in large part on what the national statistics service says is the total cost of 27 items in the basic food basket — a measure of the bare minimum that an extremely poor person needs to consume.
Monday's update said that monthly basket for a family of four cost 719 pesos in December. That works out to 5.99 pesos per day, per person.
The IMF has lost patience with these numbers after urging Argentina for years to improve this consumer price index, which lost credibility in 2007 after political appointees replaced career statisticians.
The new methodology, which has kept official yearly inflation in the range of 10 per cent ever since, has not been fully explained, even as consumers complain about soaring costs of beef and other staples.
IMF experts and Argentine economists have spent months working privately with government officials to recommend very detailed ways to get accurate numbers again, but the government has yet to adopt them.
The IMF is now on the 12th step of a 15-point process for flagging Argentina with what IMF Director Christine Lagarde called "the red card" for countries that don't follow the rules.
Today, she announced that a board meeting will be held February 1 to consider whether to censure Argentina and eventually suspend its voting rights and membership in the world body.
Even close government allies have given up defending the official statistics service, known as INDEC, which announced Monday that Argentina's annual inflation was just 10.8 per cent in 2012.
Private economists have estimated that Argentina's inflation was actually 26 per cent or more, making it the worst in all of Latin America.
A key indicator: Unions that have been key to President Cristina Fernandez's hold on power are pushing for pay raises of 25 per cent or more this year, despite a government-announced ceiling of 20 per cent.
The low official inflation numbers have historically enabled the government to keep pay raises and consumer prices from going even higher.
And by masking what economists say is the true size of economic growth, the government also has shaved billions from the payments it makes on GDP-linked bonds.
Source: The Gleaner/Power 106 News
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