MercoPress. South Atlantic News Agency

Argentina’s July official inflation averaged half private consultants’ estimates

Private consultants estimate July inflation above 1% and 14% annually

Argentina on Wednesday released its official estimate for July inflation, but the data merely confirmed widespread suspicions that the national statistics agency continues to manipulate numbers.

The Statistics and Census institute, Indec, said that consumer price index rose 0.6% on the month and 5.5% on the year. That's well below private sector estimates that put July's actual month-on-month inflation rate around 1.2% and its annualized rate closer to 14%.

Most economists say Indec has been under reporting inflation since early 2007, when then-president Nestor Kirchner reshuffled the staff at Indec and pushed out key statisticians. The government denies charges of data manipulation.

To appease concerns about Indec, Economy Minister Amado Boudou recently announced plans to review the agency and the data it has produced over the past decade. Local media reports indicated that Boudou has even asked the International Monetary Fund to participate.

The Buenos Aires City consultant organization estimates that consumer prices in July averaged 1.2% and 7.6% in the first half of the year. The consultancy works in the realm of the University of Buenos Aires and is directed by Graciela Bevacqua, who is the former director of Indec sacked by the Kirchner administration.

Fausto Spotorno, chief economist at Orlando J. Ferreres, had advanced last Monday that he didn't expect significant changes at Indec to show up in the July data.

“I think at some point we'll get a new inflation index, but not right now,” Spotorno said. “Boudou took office just a few weeks ago, which was too early for him to have had an impact on July data.”

Meanwhile, an Argentine federal appeals court on Wednesday rejected an appeal by the government to overturn an earlier ruling requiring Indec to reveal information about its methodology for calculating inflation.

The court gave Indec 20 days to disclose the information. Indec refused to comply fully with the court's first information request in October. Most economists expect inflation for all of 2009 to be between 14% and 15%.