MercoPress. South Atlantic News Agency
Argentina's inflation 54.7% in 12-months; more monetary “contraction measures” and support from IMF
Argentina's inflation rate accelerated for the third straight month in March, the government statistics agency said on Tuesday, prompting the central bank to unveil fresh measures to temper raging inflation and protect the embattled peso currency. Read full article
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Disclaimer & comment rulesA bunch of MP posters harshly criticized an inflation of about 25 per cent in Argentina during the government of Cristina Fernandez de Kirchner, prior to Mauricio Macri winning the presidential election in late 2015.
Apr 18th, 2019 - 02:02 am - Link - Report abuse -4Not one of those prolific writers seem to have noticed the information contained in the above story.
As they say, selective memory all the way.
Says the King of selective dialogue.
Apr 18th, 2019 - 03:35 pm - Link - Report abuse +3The problem with that version of events is that CK gov reported inflation was say 12% and the independents say doubled that to 25%. In reality it was 40-50% annually at least as far back as 2012-2015 when I had 1st hand experience of the inflation. International commentators by and by were clueless on the real inflationary figures for years. And I am told it was 40-50% for many years prior during CK´s tenure. No surprise as Argentina is very prone to a boom and bust type economic cycle. I do feel the current gov is trying to break this cycle of inflation leads to crash and repeating the cycle over again. But inflation is remaining stubbornly high and perhaps a symptom of a free floating peso. Even now Argentina still isn´t cheap for foreigners with the devalued peso because as inflation creeps up, so does the cost of goods and services. It is however a good deal cheaper than in 2017, although for Argentines it´s an awful situation. They are used to it of course, but all the same the rate of increase in utilities for example has been very tough. Problem is under the previous lot electric and gas were almost free to the customer, encouraging wastage and lack of investment. Heavily subsidising an economy simply stores up problems down the line, as does price fixing in the main.
Apr 18th, 2019 - 07:16 pm - Link - Report abuse +5EM is either being deliberately misleading when he mentions 25% as the pre Macri inflation, OR as he does not live in Argentina he really doesn´t have a clue. Take it from me, I lived there and know first hand the real figures.
“Miller”
Apr 20th, 2019 - 02:51 am - Link - Report abuse -3Well, congratulations, “Miller!” You are just coming on board and are already getting a lot of praise! As many as three MP readers have given you encouragements. Keep up the good work, as you have at least submitted some arguments instead of just shooting the messenger. Let's see:
”I am told it (inflation) was 40-50% for many years prior during CK´s tenure.“
Well, Miller, those who ”told you“ are not very reliable. I checked Trading Economics' 10 year inflation rates and it appears between 2010 and 2014 rates were kept at 10 per cent, then jumped to 25 per cent in 2015 and went down to 15 per cent at the end of 2015. So it turns out it was less than the 25 per cent I had estimated.
”I do feel the current gov is trying to break this cycle of inflation...“
Miller: You ”are told,“ you ”do feel.“ Tell you what. Do check independent sources of varied origin, which is not that difficult, instead of relying on your feelings or anonymous experts.
”...for Argentines it´s an awful situation. They are used to it of course...“
Oh c'mon! Who gets ”used“ to be able to buy less every week with the same money -- if you still have a job? I remember the Rodrigazo in 1975 and no sir, not one gets ”used to“ such a thing.
All you are doing here, my friend, is to sing the government's tune: ”It's all the fault of CFK and the heavy inheritance she left us.“ Well: Mauricio Macri promised to fix inflation if elected. He said ”inflation is the easiest thing to fix.“ He not only increased inflation -- domestic consumption has dropped to the floor and even business people are now mad at Macri because they sell less every day.
”Take it from me, I lived there and know first hand the real figures.”
No doubt. Miller is a very renowned statistician and we should trust him above everything else. What was your first name again?
https://tradingeconomics.com/argentina/inflation-cpi
SOURCE: TRADINGECONOMICS.COM | INSTITUTO NACIONAL DE ESTADISTICA Y CENSOS (INDEC)
Apr 20th, 2019 - 07:45 am - Link - Report abuse +2tradingeconomics.com/argentina/inflation-cpi (Historical - 2008 to 2019)
The inflation rates you are quoting from Trading Economics cite their source as INDEC.
Before the Macri Administration (before 2016), it was widely accepted that the INDEC inflation rates, the ones Tr. Ec. and you are quoting, were politicized and under-reported.
So, these INDEC rates from 2010 to 2015, between 10 to 15%, are the same under-reported rates that the CFK administration was reporting, which Miller said were around 12%.
These INDEC figures were widely discredited. They were used to underpay inflation based bond payments.
When Macri came to power, INDEC was reformed and the figures were more accurate, and much higher.
Miller said those INDEC inflation rates, the CFK administration rates, were around 12%. And that the independent calculations were reporting inflation at 25%.
I read the below Economist quote at: (there is also a section titled, “Controversy”)
en.wikipedia.org/wiki/National_Institute_of_Statistics_and_Census_of_Argentina
”Since 2007, when Guillermo Moreno, the secretary of internal trade, was sent into the statistics institute, INDEC, to tell its staff that their figures had better not show inflation shooting up, prices and the official record have parted ways. Private-sector economists and statistical offices of provincial governments show inflation two to three times higher than INDEC's number (which only covers greater Buenos Aires). Unions, including those from the public sector, use these independent estimates when negotiating pay rises. Surveys by Torcuato di Tella University show inflation expectations running at 25-30%
— The Economist
EM
Apr 20th, 2019 - 03:22 pm - Link - Report abuse +2While choosing not to add anything to the discussion itself, as all that needed saying, already has (and pretty accurately), by both Miller and Bushpilot, what called my attention was :-
YOU : “ I checked Trading Economics' 10 year inflation rates and it appears between 2010 and 2014 rates were kept at 10 per cent, etc....”
Bushpilot : “The inflation rates you are quoting from Trading Economics cite their source as INDEC”. ..........Oops !! who put that banana skin on the sidewalk ?!!?
And the Guillermo Moreno part is extremely interesting...“Since 2007” ? who was president back then ? erhh, Nestor Kirchner, CFK's hubbie.....'whodda thunk it' ?
Talk about “independent sources of varied origin”, 'n manipulating the figures, hey Reekie ?
@BP JB
Apr 20th, 2019 - 09:52 pm - Link - Report abuse -1Sure, I'll give you this -- I should not have used numbers that are not considered reliable.
Let's keep it simple:
Shall we consider valid a Bloomberg's evaluation published April 17, 2019?
The article shows the Bloomberg Misery Index combining inflation and unemployment numbers that puts Venezuela highest, puts Argentina second with 42.7 for 2018, and lists far behind Uruguay with 16.2 and Brazil's 15.2.
“Joining Venezuela in the most-distressed crowd are Argentina, South Africa, Turkey, Greece and Ukraine...showing intense economic stress and scant progress in taming price growth and getting people back to work.”
What comes to show my original point: No matter how good or bad things were under Nestor Kirchner or CFK's governments, the current situation does not show improvement in relation to the past -- indeed, it is much worse, and puts Argentina in a situation close to that of 2001 which ended up in a default.
https://www.bloomberg.com/news/articles/2019-04-17/the-world-s-most-miserable-economy-has-seven-figure-inflation
EM
Apr 21st, 2019 - 10:19 pm - Link - Report abuse 0I am not contesting that Argentina is in dire straits...because it is....unfortunately for Argentina, Macri has been unable to revert the situation inherited from CFK .....my above message was simply pointing out, and reinforcing, the notorious fact that there were serious doubts as to the reliability of INDEC indexes during CFK's reign...nevertheless, it still has a lot of fat to burn before becoming another VZ.
@JB
Apr 22nd, 2019 - 02:34 am - Link - Report abuse 0“Macri has been unable to revert the situation inherited from CFK.”
Now, that's rich.
If you know a thing or two about Argentina, you should be aware that whatever situation the country was in December 2015, Macri managed to make way worse.
Argentina today is like a country emerging from a war or from a natural disaster. Its domestic productive sector is in tatters, with thousands of small and medium-size businesses already closed. Inflation is rampant, many retired people are struggling to get by, and the worst thing is, several generations ahead will need to repay all the money that Macri and his gang joyfully borrowed, both from private and public lenders. Many economists -- including those friendly to Macri -- point out the danger of default or a catastrophic run on the peso.
I remind you that Macri has been almost four years and that not a single economic indicator shows an improvement. Not one would have asked Macri to build a developed economy in four years -- but he could, at the very least, have kept what was good and improve what was wrong, as he promised before being elected.
Inflation is “rampant”? Did you get that from INDEC? Now that it is reliable?
Apr 22nd, 2019 - 01:34 pm - Link - Report abuse 0INDEC has improved quite a bit from the CFK years hasn't it?
Now, you have real data to support your “bash Macri” rhetoric.
When you tried to use the fake INDEC data to make your favored politician look great, it fell through quickly.
Convenient for you that no one knows what inflation was during the CFK administration.
That Bloomberg article you cited compared 2019 to 2018. You said, “I shouldn't have used old INDEC data to show that Macri is worse than CFK”.
“So here is a Bloomberg article, 2019 vs. 2018, to show that Macri is worse than CFK.” She left office in 2015.
You are right about no one during the CFK years having to repay huge debts. Her administration reneged on them.
Many retired people are struggling to get by? And when CFK was in office, there were of course no retired people struggling to get by.
With “thousands” of small and medium sized businesses already closed? Source?
It's easier not to cite things, isn't it? Then no one can call you out on the poor information you present.
But the main topic of that same Bloomberg article you used was about Bolivarian/socialist Venezuela and its “war zone, natural disaster”, not Argentina's. CFK got along well with Maduro.
But you don't want to talk about Venezuela, because:
“its domestic productive sector is in tatters, with thousands of small and medium-size businesses already closed, inflation is rampant, and many retired people are struggling to get by”
Talk about “selective”.
www.bloomberg.com/news/articles/2019-04-17/the-world-s-most-miserable-economy-has-seven-figure-inflation
EM
Apr 22nd, 2019 - 05:21 pm - Link - Report abuse 0“Now that's rich”....“If you know a thing or two about Argentina....”.
Well Reekie, I've never said, nor implied I was an expert on Argentina's political / economic affairs - as you do - despite the fact I too have familiy living there.
If your expertise is based on what your family tells you, can only conclude they are not as lucky as you, to live in rich, capitalist Canada.
But that does not change the fact that, while inflation is high, it is not rampant, as you try to imply, by comparing it to Venezuela's.
“....whatever situation the country was in December 2015, Macri managed to make way worse”.
The situation today IS probably worse than in Dec 2015, but I'm not so sure it is all Macri's fault....you conveniently ignore what happened for 10 + years before he got in, and how the opposition - headed by your heroine CFK - has constantly tried to sabotage him politically, which unfortunately does not help improve the economy.
His opposition would love to see the country in flames, it's their populist way of getting back into power. Much like the PT in Brazil........criticizing everything, except their disastrous 14 year experiment, re which, until today, they still refuse to take responsibility for....on top of that, you get an incompetent b*tch like Dilma, impeached, travelling the world at taxpayers' expense, to tell left-wing audiences - and anyone else stupid enough to listen to her - how bad things are in Brazil....first during Temer's 2 year term, now Bolsonaro's.....but that's ok, must be because of their stunning success that the PT wasn't 't re-elected in 2018.
Maybe I've missed something, so perhaps you can tell me where, in South/Central America, populist adventures have worked out / ended well.
JB
Apr 23rd, 2019 - 06:33 pm - Link - Report abuse 0Now, you are advancing baloney in lieu of argument. Indeed, you have missed a huge part of what's been the Macri government. It is the collaboration he had -- voluntarily or extorted -- from a bunch of province governors who, oh surprise, happen to be Peronists.
Not even Macrists are backing your argument that poor Macri could not govern because CFK “sabotaged him politically.”
No sir. Macri got most of the laws he wanted to have approved, and when he couldn't he issued a high number of dubious decrees of “necessity and urgency.”
”Perhaps you can tell me where, in (Latin America) populist adventures have worked out/ended well.”
Don't worry about that. After surviving the era of military coup d'etats, outside intervention and the current lawfare epidemic, the Latin American peoples will keep searching for their own way to a better future.
EM
Apr 23rd, 2019 - 09:57 pm - Link - Report abuse 0Ok Reekie, I'll bow to your “expertise” of Argy affairs, because quite frankly, although it doesn't impress me, you probably keep a closer track on them than I do.
But I must say, you did a nice side step (perhaps from the “tango” ?) regarding successful (?) populist govts in Latin America....I'll take your evasive reply as “there are none”.
JB
Apr 24th, 2019 - 06:35 pm - Link - Report abuse 0“...you did a nice side step...regarding successful populist governments in Latin America...”
Well, JB. Tell you what. This may be good material for analysis...how much populist governments have done when in government (before the next hard or soft coup d'etat happens).
The results may be mixed, as you will need to factor in the international economic context each government acted, the amount of disguised / open intervention from outside countries, etc.
The question could also be completed by analyzing how much non-populist governments have improved the population's living conditions in Latin American countries.
EM
Apr 25th, 2019 - 07:16 pm - Link - Report abuse 0I can talk about govts in Brazil, which I've accompanied since the 60s.
There really isn't much to analyze.
Until the 60s, Brazil's main exports were coffee, bananas...which didn't require a large infrastructure....public services were shoddy, 'n civil servants - although being paid by the taxpayer - thought we existed to serve them.
In 57, Juscelino Kubitschek (Prez 57/60) started on Brasilia....an humongous investment which helped no one, except the politicians who were filling their pockets.
1960, Janio was elected...big hopes, which were dashed when he abruptly resigned in 1961. Eventually after a few scuffles, Jango took over....he did nothing for Brazil, except steer it left...which came to an end on 31st march 1964.
The military, whether you 'n the left, like it or not, during the intervals btwn “hunting down communists” -(included this to avoid your telling me what I already know)- started to invest in infrastructure, with big projects that have strategic importance still today :- Rio-Niteroi bridge, Itaipú, Tucuruí (hydroelectric power plants), Angra I & II (nuclear power plant (not too successful as generates very little of Brazil's needs, 'n plagued with corruption in later years), Transamazonica (4,000 km highway intended to open up the Northern region, still sparsely populated...not too successful), Petrochemical centres, “pro-alcohol” program (fuel) , and a few other lesser projects.
This contributed to a cycle of industrialization, propelling Brazil, in 64, fm 45th position to 10th (1985) in the world's GDP ranking.
After 1985, had a string of socialist-leaning govts : Sarney's, Collor's (impeached 1992, Itamar took over), FHC (95-2002) implemented 'Plano Real' 'n curbed inflation, invested quite a bit, but at the cost of increasing Brazil's foreign debt, then Lula & Dilma (2003/16) who invented the two “PAC's” - hundreds of US$ billions disappeared, projects abandoned, crisis. Looks like only the military and FHC contributed positively.
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