BUENOS AIRES Feb 13 Argentina unveiled a new
consumer price index on Thursday, hoping to tame criticism the
government is underreporting inflation and seeking to restore
investor confidence in official economic data.
According to the revamped index, Argentina's consumer prices
rose 3.7 percent in January compared to December,
Economy Minister Axel Kicillof announced on Thursday.
The figure was the first reading published under a new index
designed in consultation with the International Monetary Fund.
The previous index had been widely discredited and was widely
considered to under report the actual number, prompting censure
from the IMF.
Alberto Ramos, an economist with Goldman Sachs, said the
January figure was "better than expected," and appeared to be a
"genuine effort" to narrow the gap between official figures and
private inflation estimates.
"The key issue going forward will be whether they are
consistent and stay the course because one data point does not
make a trend," he said.
Analysts have accused Argentina's government of manipulating
inflation figures since early 2007 for political gain as well as
to reduce payments on its inflation-indexed debt.
Private economists estimated consumer prices rose 5.6
percent last month, according to the median in a Reuters poll of
six analysts. Independent economists say Argentine inflation is
running at about 30 percent annually.
Already suffering from one of the world's highest rates of
inflation, the figure spiked in January as a sharp devaluation
of the peso made imports more expensive.
Analysts predicted the government would not reveal the true
extent of inflation in January for political reasons and as it
tries to keep a lid on wage demands. Labor talks due in March
are expected to be tough.
The new index is seen as a sign that the country is trying
to get its relationship with the IMF back on track. Previous
official inflation figures were often less than half private
The government made changes to the consumer price index
methodology in 2008, but they failed to quell criticism.
The highly-anticipated index will now measure prices on
goods and services nationwide at more than 12,000 stores.
Previous readings were based on prices in Buenos Aires and the
city's metropolitan area.
On Thursday, President Cristina Fernandez lashed out at
supermarket chains and other business leaders for a recent spike
in prices, which she blamed on "speculation."
With reserves draining away, Argentina is seeking access to
international money markets, which it has been shut out of since
its massive 2002 debt default.
The country has also recently revived long-stalled talks to
resolve some $9.5 billion in debt it owes to the Paris Club, a
group of creditor nations.
Argentine officials are seeking a settlement with the Paris
Club at a time when its currency reserves have fallen to
seven-year lows. Government officials hope any deal could bring
new sources of international funding and provide hard currency.