Argentina Inflation: Nr. 2 in World?

BY LBC STAFF

Argentina will likely have one the world’s three highest inflation rates this year, according to a Latin Business Chronicle analysis of estimates from private consultancies and new estimates from the International Monetary Fund (IMF) for the rest of the world

Argentina’s government predicts inflation will reach 8.9 this year. However, those numbers are widely discredited among private sector economists after the government started interfering in the official statistics agency INDEC in 2007.

Private sector economists estimate the actual rate will be between 25 and 30 percent.

The lower end of that estimate would place it just behind Venezuela, which is estimated to have an inflation of 25.8 percent this year. An average of the rate would be 27.5 percent, which would place it ahead of Venezuela.

Only Belarus will have a higher rate worldwide: 41 percent, the IMF estimates.

Instead of fixing its methodology to reflect the true rate of inflation, Argentina’s government is persecuting independent economists and harassing media that report their findings.

A judge has subpoenaed six newspapers for the names and phone numbers of all reporters and editors who have covered Argentina’s economy the past five years, so they can be called as witnesses against their sources, AP reported Friday.

Earlier this year, the government started fining private consultants that issued inflation estimates. Fines of 500,000 pesos (US$123,442) were issued to consultancies, including abeceb.com, Econviews, Estudio Bein & Asociados, Finsoport, GRA Consultoras and MyS Consultores, as well as Graciela Bevacqua, who used to oversee INDEC's consumer price index, according to The Wall Street Journal.

World’s Highest Inflation
Estimated annual inflation for 2011

NOTE: Argentine rate calculated as average of 25-30%
estimate by private consultants. Other estimates from IMF.

Sources: IMF, Ambito, Latin Business Chronicle