Bloomberg News

Argentine Opposition Lawmakers Say Prices Rose 1.5% in March

April 11, 2013

Argentina’s consumer prices rose 1.5 percent in March, more than in February even after supermarkets agreed to freeze prices until June, opposition lawmakers said today.

Consumer prices rose 24.4 percent from a year earlier, opposition lawmaker Juan Tunessi told reporters in Buenos Aires. Opposition lawmakers began releasing private inflation estimates in May 2011, after the government fined private economists for releasing their own indexes. Congress members don’t identify economists by name to protect them from new fines.

Some retailers, including supermarkets and home appliance stores, have agreed with the government of President Cristina Fernandez de Kirchner to freeze prices since February. Still, Argentines expect prices to rise an average 30 percent over the next 12 months for a fifth straight month, according to a poll by Torcuato Di Tella University released March 19.

“Forced price freezes are a time bomb,” lawmaker Eduardo Amadeo said at the news conference. “This is opening the door to more social conflicts because unions will demand higher wages while companies are banned from raising prices.”

Yesterday the government set a price cap on gasoline for six months. A few hours later, YPF SA, the country’s biggest energy company that Argentina nationalized last year, raised prices 9 percent.

Online Prices

Price Stats Global Services, which tracks online prices, reported today that Argentine prices fell 0.19 percent in March from the previous month after rising 1.1 percent in February due to the price freeze, according to director Alberto Cavallo.

The last time consumer prices fell in South America’s second-biggest economy was in February 2009, when they dropped 0.9 percent, amid a contracting economy, Cavallo, a professor at the Massachusetts Institute of Technology and son of former Argentine Economy Minister Domingo Cavallo, said in a telephone interview from Cambridge.

“The government managed to control some prices in the short term, but I don’t believe this is going to have an impact in inflation in the long term,” Cavallo said. “Some prices have started to show an increase and others are vanishing from the shelves.”

According to Cavallo, the government will try to keep prices in check until the mid-term elections in October.

Inflation estimates by private economists have been above the official data since early 2007, when Fernandez’s husband and predecessor, Nestor Kirchner, changed personnel at the statistics agency known as Indec. The International Monetary Fund has urged the government to release more reliable data and on Feb. 1 Argentina became the first country to be censured by the Washington-based lender for not providing accurate data.

Indec is scheduled to release March’s consumer price index tomorrow at 4 p.m. local time.

“This Congress index has become so reliable that judges ask us to send them reports so they can rule in lawsuits based on this inflation,” Tunessi said. “There’s a total lack of macroeconomic policies to address inflation.”

To contact the reporter on this story: Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net


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