The Argentine government says inflation is 9.8%. Everyone else thinks it could be as high as 20%. President Cristina Fernandez has decided to hunt down those reporters who dare challenge official government statistics which have been reportedly manipulated to lower the government’s borrowing costs. This is definitely a story that makes you appreciate the freedom of the press…and remind you how important it is not to let politics influence the collection of important economic data.
For more details see: “Argentina targets news reporting of inflation data.”
Part of the government’s motivation may also be to protect profligate spending that is boosting the economy at least in nominal terms. For more on the aggressive spending programs launched by Fernandez see “Argentine economic plan: Raise spending, salaries.”
CNBC provides a revealing summary of the latest newsletter from Shadow Government Statistics (SGS). According to SGS, inflation is running at a 9.6% clip using BLS methods in place before 1980 that did not use hedonic adjustments to try to account for the change in quality of products. Rolling back just 22 years gives a 5.5% inflation rate.
See “Inflation Actually Near 10% Using Older Measure” for more details.