A dismissive attitude to the suffering of the population.
By Bianca Fernet, Argentina, The Bubble, and cross posted from WOLF STREET:
What is this, 2013?
The headlines surrounding Argentina’s economy read like a veritable tale of two countries. If you read the international press or run in diplomatic circles, sheer euphoria. Argentina has quickly righted the economic boat by settling with the holdout “vulture” funds, removing currency controls and export restrictions, and restoring a level of respectability and professionalism to governance.
Inside Argentina, headlines are telling a story we’ve all heard before, starring inflation. Persistently high and rising inflation is troubling, but more troubling is the government’s flippant and dismissive treatment of how difficult it will be to quash inflation and just how much it is affecting the lives of Argentina’s people.
In early January, Finance Minister Alfonso Prat-Gay stated that the monthly inflation increases of 5% in December were a “sensation” and that, “we are coming down in the first 15 days of January to inflation levels more or less similar to what we experienced in October [1.5%] and September [1.7%].”
Prat-Gay went on to chalk up December’s runaway inflation to a result of lifting the currency controls known as the cepo and predicted that inflation would be well below 1% per month by February. Spoiler alert: that didn’t happen [read… Is Inflation Really Just A ‘Sensation’?].
How High Is Inflation?
Inflation is high enough that everyone is squabbling over how to measure it again.
In the City of Buenos Aires during the first trimester of 2016, the price of the basic basket of foods increased 14.5%, only slightly higher than the total basket including other goods and services that rose 11.3% over the same period. It’s staying up there too — from December to January, the basket of consumer goods rose 5%, whereas from February to March it rose 4.4%.
Private entities consulted by La Nación estimate that March saw a monthly inflation of 3.7%, which translates into inflation between 32% and 35% per year — at or above the 30% inflation presided over by former President Cristina Fernández de Kirchner. In April, estimates predict inflation will exceed 6%, or 40% year-on-year.
You would have to be actually dead to not notice how hard 6% monthly inflation bites at your lifestyle…
Continue reading the article at WOLF STREET