MercoPress. South Atlantic News Agency

Argentine ‘Congress index’ shows January inflation reached 1.9%

Congress opposition members making the announcement

Argentine congress members announced on Wednesday that the inflation index for January based on an average of private sector estimates reached 1.9%, similar to the previous month of December.

The head of the opposition party Union Civica Radical block, Ricardo Gil Lavedra said that January confirmed the strong impulse of inflation since the first month of the year usually marks a seasonal softening of the index.

According to the ‘Congress index’ in 2011 consumer inflation reached 23%, compared to the official INDEC index below 10%.

Lavedra said that inflation remains at the heart of the main problem faced by the Argentine economy, adding that the ‘structural causes” responsible for the high indexes remain in place.

He also expressed concern with recent announcements from the Argentine government indicating that it would not endorse salary agreements that don’t respect the official inflation index estimated for 2012, and which is based on INDEC projections.

“Another surprising aspect of the January index is that it comes in a context of economic deceleration, with slower growth forecasts”, said Lavedra who emphasized it has become crucial to give inflation and other official index readings “the necessary transparency and reliability, now non existent”.

“This will be evident when the next round of salary negotiations begin and unions will naturally appeal to what they consider is the relevant inflation rates, not what the government imagines”.

The ‘Congress index’ was born when private consultants were fined and threatened with imprisonment for revealing indexes that did not follow the INDEC methodology.