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We thought only Elvis was doped
Argentina’s government grows bizarre; inflation, as per them, rocks!
Argentina is bleeding. The sky rocketing inflation is neutralising whatever benefit the high growth rate is giving its population. But surprisingly, to counter this problem, the government has taken bizarre steps to satisfy its electorates. It has doctored Consumer Price Index (CPI) to show inflation lower than what it actually is. The updated CPI (June 10, 2008) shows that each time the price of any product increases too much, it will be taken out from the list presuming that consumers will shift to other products. According to government statistics, inflation is just around 9%, whereas the real figure is terribly higher.
Alfonso Prat-Gay, former Central Bank Governor, estimates the inflation figure to be hovering around a whopping 32%. Dante Sica, Director of Abaceb, a consulting firm, opines that the figure would be 16% to 18%, while Poliarquia, a pollster, reveals the figure was 54% in February and 26% in May, 2008.
To make matters worse, the government has increased tax on soya bean exports from 35% to 45% and also is imposing tax on other farm products including wheat. This has led to widespread agitation and blocking of supply of agricultural products. This has created huge upward pressure on the food prices. But all is hunky dory as per the vivacious President Cristina Farnandez. The rise of inflation in May, according to the government, was just 0.56% over the previous month. INDEC, the government ‘statistician’ institute, hilariously claims that the major cause of inflation is the rise in education and health care costs.
When Cristina Farnandez de Kirchner (above) succeeded her husband as President, she promised to bring many changes. One couldn’t have imagined that the most fantastical change would be a statistical one. Argentina will continue to suffer till it takes long term measures to revive its economy. To say policy changes are imperative is almost akin to kid-speak. The first step is actually accepting the problem!
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