In doing so, they give a very good reason for why the Kirchner governments have so stubbornly refused to concede that inflation is a problem in Argentina:
Already, a good share of Argentina's debt is in default. What else do you call it when a government that owes over $30 billion in inflation-indexed debt manipulates its consumer-price statistics? Through a variety of crude measures (such as firing its top statisticians), the government is publishing an understated inflation rate that is used for calculating indexation payments.
The official inflation rate in Argentina for the past 12 months is under 10%. But the true inflation rate appears to be at least 30%, according to virtually every neutral source.
I think that maybe the best thing to be in Argentina right now is a pot and pan seller!!
3 comments:
I'm not surprised at Argentina's actions at all. The prevalent policy all along has been to deny any legitimacy to the debt it incurs. It's sad that Argentina never seems to learn a lesson from bad fiscal and monetary management.
Angus, I have a serious question.
I was considering going to Argentina later this year since I have a friend who moved there and can put me up.
Should this strong inflation and possible instability make me more or less likely to actually make the visit?
Thanks!
Well Argentina is a great place to visit. BA is way cool. Great food, great ambiance. If things stay as they are there will be demonstrations downtown, roadblocks on highways and the possibility of less than full shelves in the supermercado. It is my own, off the top of my head, no guarantee implied opinion that as a visitor you'd not be in any real danger. I'd go, but I've also voluntarily visited Cambodia, Rwanda, Tunisia, Borneo, and France. If you take a look at the last couple weeks postings about Argentina here:
http://washingtonbureau.typepad.com/southamerica/
you can get an idea about what's going on.
If you do go, try to go in our winter / their summer so you can visit Patagonia.
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