MercoPress. South Atlantic News Agency

Argentina among countries with higher inflation

Argentina figures in 2005 among the world's economies with the highest levels of inflation, 9,6%, behind Venezuela with 15,3% and Russia, 12,5%, according to a report from the Argentine Institute for Social Development, Idesa.

"Argentina is the only country where inflation in the last twelve months doubled, from 4,9% in 2004 to the current 9,6%", reads the report.

However it also points out that Argentina has been through far worse inflation scenarios in the not too distant past: in the seventies inflation multiplied 1.500 times; in the eighties 3,3 million times and in the nineties with the convertibility system the accumulated consumer price index was 56%.

"Taking this data as reference, compared to the 12% projection estimated at the end of 2005, it doesn't sound as an exaggeration", adds the Idesa report.

Idesa also points out that under current circumstances, "there are many doubts as to which is the tolerable and reasonable prices index rate expansion".

"More concerning are factors indicating the presence of repressed inflation", which means it's becoming more evident that "the strong lag in salaries and pensions arising from the 2001/02 devaluation of the Argentine peso is not indefinitively tolerable".

The Argentine Statistics and Census Institute is scheduled to reveal this week the August consumer, wholesale and construction prices indexes which apparently show a strong declination in the expansion tendency compared to the full inflation point recorded last July.

If this proves right the Argentine government could still manage to have the annual inflation rate in the original target range of 8 to 10,5%.