MercoPress. South Atlantic News Agency

Argentina's inflation record controversy to be aired in Congress

In all Argentine cities with a local index measuring the evolution of retail prices, inflation last May was double that registered in the capital Buenos Aires, reported Monday the National Statistics and Census Office, Indec.

Prices actually rose during May on average 1% in cities of seven Argentine provinces, which compares negatively with the official retail prices index for Buenos Aires and the metropolitan area, which registered 0.4%, and the so called national index, 0.7%. As happened in April in some interior cities such as Mendoza and San Luis inflation jumped 2%; in Catamarca 1.1% and in Cordoba, Tucuman and Santa Fe the percentage was 0.9. The province of Buenos Aires registered an increase of 0.6% and Buenos Aires City, 0.4%. The difference can be explained because of the extended network of subsidies to transport, basic food products and utility rates, mainly in metropolitan Buenos Aires. Inflation at national level in the first five months of this year reached 4.6% compared to 3.4% in metropolitan Buenos Aires. In the last twelve months the difference is also significant, 10.2% and 8.8%. The items which reported the highest increases on average are Food and Beverage, 0.22%; Transport and communications, 0.1%; Clothing 0.09% and Housing and basic services, 0.008%. Argentina's Finance Minister Felisa Miceli admits that the differences between the capital and other urban centers can be tracked to the policy of freezing public utilities rates (electricity, gas and transport), while in most of the rest of the country these costs have been adjusted. However the Indec union argues that the differences can be better tracked to the fact that the head of the office, Beatriz Paglieri hand picked by President Nestor Kirchner, can only manipulate the figures of the office she heads in Buenos Aires City. This does not happen in the rest of cities in the country with the Statistics Office branches. The controversy about inflation which has been going on for weeks, including the removal of several officials who apparently did not "accommodate" to the desired line is scheduled to be aired this week in the Lower House of Congress. The union claims that Ms Paglieri not only has changed the methodology for calculating inflation but is attempting to sack staff that has given testimony in the case against Guillermo Moreno, head of Domestic Trade and who has promised to keep 2007 inflation below two digits "at any cost", for alleged manipulation of results.