Argentina: ditadura economica a caminho

Argentina's economy
Lies and Argentine statistics
Stalinist practices in Buenos Aires
The Economist, April 20th 2011

MOST Argentines reacted with a shrug when their government began doctoring its consumer-price index in 2007. Cooking the books cost holders of the country’s inflation-linked bonds at least $2.3 billion last year. But anyone else who needed to know the true inflation rate simply turned to a clutch of private economists who drew on their own price surveys, data from provincial governments and other official statistics. They reckon that inflation is now running at about 25%. That is far above the 10% reported by INDEC, the government statistics agency, but less than the 30% wage increases public employees have received in recent years.

A presidential election looms in October and inflation, and the government’s denial of it, is perhaps the biggest threat to the prospect of President Cristina Fernández winning a second term. That may be why Guillermo Moreno, the thuggish commerce secretary, is moving to stamp out the unofficial, but widely trusted, price indices. To do so he has dusted off a decree, penalising misleading advertising, approved by a military dictatorship in 1983. In February he sent letters to 12 economists and consultants ordering them to reveal their methodology, on the grounds that erroneous figures could mislead consumers.

Some of Mr Moreno’s targets refused; the rest were analysed by INDEC, which predictably found their methods flawed. Seven of them were then ordered to pay the maximum fine of $123,000 (all have appealed). The financial threat is especially serious for Graciela Bevacqua, who lost her job as head of INDEC in 2007 for refusing to tamper with the price index. She now publishes her own inflation estimate with the help of a business partner and former students.

“The others are companies or foundations,” she says, “but we don’t have clients or assets. The only thing I own is my house where I live with my children. They’ll take it away if they continue with this.” Only one firm has stopped publishing its inflation estimate. So far Mr Moreno has merely succeeded in drawing attention to his own mendacity.