Fight over Argentina’s inflation rate pits government against private economists

Juan Ferero/Washington Post - Graciela Bevacqua's work — compiling inflation rates sharply at odds with Argentine government figures — has made her a target of government regulators.

BUENOS AIRES — Graciela Bevacqua’s work, compiling inflation figures that turn out to be sharply at odds with Argentine government statistics, clearly irritates officials. First came a $125,000 fine, followed by a criminal complaint against her team of 20 university students.

These days, with the government basking in President Cristina Fernandez de Kirchner’s resounding reelection victory last month, Bevacqua and a smattering of economic consultancies that compile inflation figures make up a lonely dissidents movement.

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What is Argentina’s true inflation rate?
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What is Argentina’s true inflation rate?

Facing government sanctions, most continue to calculate their own inflation figures. But they do it quietly, their findings used mainly in private reports issued to clients, economists sanctioned by the government said in interviews.

“I feel that I am carrying out serious research and providing an alternative to the government pricing index, which is not credible,” said Bevacqua, a mathematician whose group, GB Consumer Price Index, is nonprofit.

For the first time since 2007 — when statisticians and field workers at the National Institute of Statistics and Censuses were replaced with political appointees and the official inflation rate started to fall — the once-hot-button issue of inflation in Argentina is fading from the front pages, said Victor Beker, director of the Center for Research on the New Economy at the University of Belgrano.

“What the government set out to do was to suppress alternative statistics,” Beker said. “The objective is to ensure that the consultancies stop publishing and that the official numbers become the only statistics.”

Calls and e-mails seeking comment from the Ministry of Economy and Finance and the president’s office were not returned. In speeches, though, Fernandez de Kirchner and other officials have defended the country’s unorthodox economic policies, including high taxes on agricultural exports, heavy spending and energy subsidies.

“Our different way of doing things has permitted growth and the creation of jobs,” Vice President Amado Boudou recently told reporters. “Argentines can be proud we did things our way.”

‘No one believes’ official figures

To be sure, public outrage over inflation numbers has given way to giddy optimism as Argentina’s red-hot economy continues to grow. That has won the loyalty of Argentines such as Veronica Mariño, 38, a state worker who contends that the higher inflation figures offered by private economic consultants are cooked up to tarnish the government.

“The inflation issue, to be honest, does not worry many Argentines as long as there is work,” Mariño said.

But the inflation data put out by private economic consultants — and what their findings ultimately say about the overall health of South America’s second-largest economy — have deep resonance among multilateral institutions in Washington, credit-rating agencies and banks that closely track this country’s debt, say economists here and abroad.

Noting that Argentina had not met its obligations to improve its data-collection system, the International Monetary Fund said in September that it would rely on “alternative measures of GDP growth and inflation,” including estimates by private consultants and provincial governments in Argentina. Creditors, angry at being shortchanged on Argentine debt payments indexed to inflation, also track what they consider the genuine economic data issued by Bevacqua and the consultants.

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