MercoPress. South Atlantic News Agency

Who do you believe? CFK’s January 0.7% inflation or private consultants 2%

“Wide dispersion and distortion of prices” but no inflation insists Cristina

Argentina’s official and controversial consumer price index in January increased 0.7%, a number disputed by private institutions that argue inflation in the first month of 2011 reached a floor of 2%.

According to the much questioned Indec (Argentina’s Statistics and Census Office) January’s inflation was influenced by tourism (high season), clothing and health services. Some vegetables and fruits soared, lemons 41.2%; carrots, 37.5%, lettuce, 29.9% while others dropped: peppers 19.5%, marrow 8.8% and peaches 4.2%.

However for prestigious private consultants such as FIEL (Foundation for Latinamerican Economic Research) the index was far higher: 2%. Similarly for Joaquin Ferreres & Associates while for Ecolatina, directed by former Economy minister Roberto Lavagna, the January consumer inflation index was 2.2%

Regarding the so called Basic Food Basket (CBA) which is used in Argentina to gauge indigence, according to Indec in the twelve months to January 2011, the index jumped 17.8%, which in money terms means 580 pesos, equivalent to approximately 140 US dollars. According to this definition any family of four in Argentina making less that 580 pesos a month is indigent.

However for private consultant FIEL, the CBA line in January 2011 stood at 1.141,50 Pesos, equivalent to 285 US dollars.

Similarly with the Total Basic Basket (CBT) which establishes the poverty line. During the twelve months to January 2011 the index according to Indec climbed 15.5% reaching the sum of 1265.25 Pesos, equivalent to 316 US dollars. However for FIEL the CBT poverty line stands at 2.118 pesos equivalent to 530 US dollars.

Soaring prices in Argentina have become a highly controversial issue with government explicitly denying the word “inflation” arguing that what really exists is “a wide dispersion and distortion of prices”, which anyhow is being addressed.

“It’s an issue that does not concern the government”, is the official line repeated by President Cristina Fernandez de Kirchner, Cabinet Chief Anibal Fernandez, Economy minister Amado Boudou and Domestic Trade Secretary Moreno.

However Argentina’s Business Leaders Association has called on the government “to stop denying inflation” and have Indec “starting to tell the truth and stop with the lies”. Similarly one of the most powerful industrialists in Argentina Cristiano Ratazzi said warned that “inflation is like a hard drug that creates illusions but also social tensions”. Furthermore Hugo Moyano the powerful labour leader and close political associate of the Kirchners, has instructed unions to begin salary negotiations with a floor of 30%.