Argentina Reports May CPI of 4.2% in Debut for Official Indexby
Macri govt unveils first official national inflation data
Index seeks to restore investor confidence in govt statistics
Argentina’s consumer prices rose 4.2 percent in May from the previous month, the first results of a new inflation index from President Mauricio Macri’s revamped national statistics agency.
Price increases in the Greater Buenos Aires metropolitan area were led by a sharp rise in miscellaneous goods and services, which rose 16.1 percent. Transport and communications and housing and basic services rose 5.6 percent and 5.2 percent respectively, INDEC, as the statistics agency is known, said on Wednesday. Core inflation, which discounts seasonally volatile items such as food and fuel, rose 2.7 percent.
Macri is attempting to restore investor confidence and close a chapter on nine years during which private economists and the International Monetary Fund questioned the accuracy of Argentina’s economic data. The new consumer price index is the first official measure of inflation since Macri took office in December and ordered an overhaul of all the government’s statistics.
“We’re working to turn the page on this idea of censorship in Argentina,” INDEC Director Jorge Todesca said in a press conference. “There’s still a lot left to do to rebuild the pillars of Argentina’s statistics.”
Argentina in 2013 became the first country to be censured by the IMF for not providing accurate data on inflation and economic growth. Under the previous government, official surveys regularly reported inflation at about half of what private economists estimated.
The government’s inflation estimates began to diverge from non-government economists in 2007 after former President Nestor Kirchner replaced senior officials at INDEC. When private economists began publishing their own surveys, former Commerce Secretary Guillermo Moreno fined more than a dozen research firms for producing reports that differed from government data.
An IMF mission will visit Argentina in July to review changes made to the government’s methodology, La Nacion reported citing individuals at INDEC it didn’t name.
Former President Cristina Fernandez de Kirchner made some concessions to the pressure exerted by the IMF and in 2014 launched a national consumer price index to replace the greater Buenos Aires index. While the first readings gave investors some optimism about its accuracy, within a few months the doubts returned.
Inflation has soared this year as Macri implemented a series of reforms, including removing currency controls, devaluing the peso and raising utility bills by as much as 500 percent to cut subsidies that were the main cause of the largest budget shortfall in over two decades.
Even with Macri’s arrival, the confusion surrounding inflation has persisted.
After initially adopting an inflation index produced by the city of Buenos Aires’ statistics agency to determine bond payments, the government said in March it would stop using the gauge because the removal of subsidies meant its inflation readings were higher than in the rest of the country. Instead, it began using an index from the province of San Luis.