MercoPress. South Atlantic News Agency

Argentina’s 12-month inflation expectations yield slightly to 27%, says UTDT

Professor Guido Sandleris, “the government's official data have scarce credibility”

Argentina's 12-month inflation expectations slid in October for the first time in eight months, according to the median estimate in a survey published by the Torcuato Di Tella University, UTDT.

The university said on Thursday in its monthly report that median inflation expectations fell to 27%. That puts expectations down from 30% during each of the last seven months, according to the survey. On an average basis, the response rose slightly to 35.1%, from 34.9% in September, UTDT said.

The gap between median inflation expectations and the level of inflation reported by the government stats agency Indec totalled 17 percentage points in the survey.

“A gap of this magnitude shows that the government's official data have scarce credibility,” UTDT Professor Guido Sandleris said in a statement.

“Given the average response, expectations inflation for the next 12 months remain practically unchanged for all regions” of the country, Mr. Sandleris added.

Argentina's stats agency, Indec, says annual inflation as measured by its consumer price index totals about 10%.

The credibility of Indec's CPI has been questioned ever since long-serving professional staff at the agency was replaced with political appointees in early 2007.

President Cristina Fernandez administration routinely denies charges that it manipulates Indec's economic data. But most private-sector economists said annual inflation hovers around 25%.

UTDTs report was based on a nationwide survey of 1,200 people by consultancy Poliarquia Consultores in early October.

Argentina has also clashed with the IMF regarding the reliability of its Indec stats on inflation and GDP. An initial understanding to jointly work out a new transparent agreed mechanism was never complied by Argentina and the IMF has given the Cristina Fernandez administration until December 17 to honour its commitment.

The Argentine private sector and unions usually refer for their estimates to the so called ‘Congress index’ released by opposition members from the Freedom of Expression congressional committee and based on an average of nine private agencies exposed to serious sanctions if they make public their estimates.

The Congress index for September was 1.93% over August totalling 18% in the nine months of 2012 and 24% in the last twelve months.