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Montevideo, September 24th 2018 - 11:47 UTC

Court ruling and economy contraction push Argentine inflation down in August

Monday, August 29th 2016 - 03:59 UTC
Full article 25 comments
“As part of the prices surveyed to measure the inflation rate, Indec will start using the cheaper natural gas rates instead of the new tariff scheme” said Jorge Todesca. “As part of the prices surveyed to measure the inflation rate, Indec will start using the cheaper natural gas rates instead of the new tariff scheme” said Jorge Todesca.
Macri's administration imposed significant increases on gas and electricity prices but the Supreme Court cancelled the increases Macri's administration imposed significant increases on gas and electricity prices but the Supreme Court cancelled the increases
Todesca said the economic indices surveyed by Indec show an “across-the-board drop,” focused mainly on the industrial and construction sector. Todesca said the economic indices surveyed by Indec show an “across-the-board drop,” focused mainly on the industrial and construction sector.

Inflation in Argentina during the current month of August could drop to 0.7% because of the Supreme Court’s decision to strike down the hikes in natural gas prices for residential users, according to the official stats office Indec. Similar stats also indicate a strong contraction of the Argentine economy.

 “As part of the prices surveyed to measure the inflation rate, Indec will start using the cheaper natural gas rates instead of the new tariff scheme, which had been implemented by government”, revealed Indec chief Jorge Todesca.

The administration of president Mauricio Macri imposed significant increases on gas and electricity prices (400% to 500%) to recover bottom rock rates which demand hundreds of millions of dollars in subsidies, a legacy from the populist ex president Cristina Fernandez. But on appeal the Argentine Supreme Court cancelled the increases for not having carried out a public hearing.

Despite the gas prices ruling Todesca acknowledged that all indices measured by the bureau show “an across-the-board drop” during August.

Consumer prices rose 2% in June, according to Indec, the third following an overhaul of Argentina's economic statistics. Prices had risen 3.1% in June and 4.2% in May, with annual figures still not available. However private estimates, year to year, are in the range of 40%.

Todesca said the economic indices surveyed by Indec show an “across-the-board drop,” focused mainly on the industrial and construction sector. Nevertheless, he said there’s a “reasonable expectation for the scenario to improve,” claiming that, for example, construction permits requests are growing.

Indec posted two weeks ago an empirical estimate on the level of unemployment, reporting a 9.3% figure for the second quarter of the year. Todesca questioned the previous unemployment reports issued during the Cristina Fernández administration, claiming they were “inadequate” and that the figures reported lower than the real ones.

Back in 2007, the year in which the bureau was first subject to manipulation and career statisticians began quitting or denouncing threats and government meddling, unemployment stood at 8.5% in the second quarter, significantly down from the heights of the 2001-2002 crisis in which figures breached the 20% mark.

Other Indec stats help to understand the “across the board” drop of prices in August, closely linked to a strong contraction of the economy. In effect last week was published the Monthly Economic Activity Estimator (EMAE), which usually correlates closely with Argentina's GDP figures published at a later date and results showed that recession is accelerating, with the latest month showing the biggest contraction by far: June ended with a 4.3% decline in terms of economic activity in the yearly comparison.

In the previous two months, the drop had been roughly half that figure, as both April and May ended with a 2.1% contraction according to Indec.

However the Argentine economy in the first three months of the year did slightly better, with growth of half a percentage point on average in January, February and March (up by 0.3%, 1% and 0.4% respectively). This means that, in the first half of the year, the Argentine economy fell by 1.3% according to EMAE’s estimate.

 

Categories: Economy, Politics, Argentina.

Top Comments

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  • Enrique Massot

    “...a strong contraction of the economy...results showed that recession is accelerating...”

    Another story full of bad news about president Macri's handling of the economy that follows a previous article reporting raising unemployment.

    As a much touted “rain of investments” remains a distant and blurry future, Argentina continues to plunge deeper and deeper into yet another dark period--only eight months after a new government took charge of business.

    The unemployed continue to multiply; lower consumption levels and a wave of imported consumption goods is hurting small and medium-size retail outlets and producers.

    ”Nevertheless, (Todesca) said there’s a 'reasonable expectation for the scenario to improve...'”

    Indeed. Hope in a better future is the only positive feeling reminding. As they say, “hope is the last thing you lose.”

    Aug 29th, 2016 - 04:49 am 0
  • Think

    TWIMC

    Funny parallelisms and worrying divergences in Argentina's corruption...

    FELISA MICELI...:
    Former Economy and Production Minister of Argentina...
    The police found, in June 2007, a quite unexplainable bag containing 100,000 ARS and 31,670 USD in her office...
    She was forced to renounce almost immediately and convicted, the same year, to 4 years imprisonment and 8 years inhabilitation...
    https://es.m.wikipedia.org/wiki/Felisa_Miceli

    GABRIELA MICHETTI...:
    Current Vice President of Argentina...
    The police custody stole, in November 2015, a couple of quite unexplainable bags containing 245,000 ARS and 50,000 USD from her house...
    This was some 9 months ago... She is still in office and has just recently been imputated...
    https://es.m.wikipedia.org/wiki/Felisa_Miceli

    Irony of destiny..., the public prosecutor in both cases is the same person!
    Let's see if our judicial system treats all persons equally...
    Dum Spiro Spero...
    El Think.

    Aug 29th, 2016 - 07:27 am 0
  • Enrique Massot

    #2 Think

    Absolutely. And there is more:

    Prosecutor Guillermo Marijuan, who conducted search warrants with excavators looking for buried money in CFK properties, was heard on a voice message promising somebody to leave Cristina “at the edge of being arrested,” with prohibition of travelling out of Argentina and obligation to show up to testify in court.

    The recorded voice message shows a clearly inappropriate attitude for a prosecutor, who appears to be reporting about his work to somebody who is not a member of the judiciary.

    Marijuan's message also reveals animosity against the person he is prosecuting, which is inappropriate for a prosecutor, who must keep an objective stance when trying to gather proof to convict someone.

    More importantly, the incident goes on to show the role of part of the judiciary, which has been working overtime to link CFK to some illegal activity. (So far they haven't found any solid leads--no offshore accounts for example-unlike president Macri who is still being investigated after the Panama Papers revelations).

    Some info in English about the Marijuan voice message:
    http://www.bubblear.com/im-on-the-brink-detention-cristina-kirchner-takes-to-twitter-over-leaked-audio/

    Aug 29th, 2016 - 02:48 pm 0
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