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The new consumer price index in Argentina has unveiled a higher inflation rate saying that consumer prices rose 3.7 percent in January compared to the month before. According to the government, consumer prices rose 10.9 percent in 2013. Â Since January 2007, Â it has been reported that the government underestimated inflation and thus overestimated the country’s economic growth.
A strategist at Barclays Plc Donato Guarino, commented, “Argentina finally comes clean and prints a monster month-on-month inflation figure in compliance with the IMF,” according to Bloomberg News. The government did not publish an annual inflation rate.
Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum. As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.
University professor Elida Repetto, reported to The Star Tribune that, “The worst thing the government did was intervene in the statistics institute. It’s like breaking a thermometer; you never know if you have a fever. Now they’re putting out a new index. It will have a cloud of doubts over its validity.”
Argentina is a federal republic located in southeastern South America. It is the eighth-largest country in the world, the second largest in Latin America and the largest Spanish-speaking nation. Argentina also claims sovereignty over part of Antarctica.
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Bloomberg has reported that wages have raised an average of 24 percent annually over the past seven years, compared with average annual inflation of 9.4 percent. In addition, Argentina has seen dangerous protests in recent months as its unions prepare for annual negotiations over the nation’s pay hikes.
Image Credit: www.ibtimes.com
