Government food price claims baffle Argentines

Published on NewsOK Modified: January 17, 2013 at 4:55 pm •  Published: January 17, 2013
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BUENOS AIRES, Argentina (AP) — Six pesos a day. That's all it takes to eat in Argentina, at least according to the government.

But on the streets of the capital, 6 pesos doesn't stretch beyond a pack of chewing gum, or a cup of yoghurt, or a single "alfajor" cookie. Argentina's traditional caramel-and-chocolate treats are tasty, but don't provide what the government calls the "minimum calories and proteins needed to sustain a moderately active adult."

As the International Monetary Fund moved closer Thursday to sanctioning Argentina for inaccurate inflation data, The Associated Press checked prices in Buenos Aires, and couldn't find a can of soda for less than 8 pesos. Even a ham and cheese sandwich costs 13 pesos at a downtown kiosk. That's if you skip the lettuce and tomato. Food purchased at supermarkets is more economical of course, but even there, 6 pesos bought just one can of green peas, or a pound of raw rice — not enough for a complete and healthy diet.

"Nobody eats for 6 pesos a day," said Marta Villagra, 25, as she lifted her 5-year-old son into a garbage container on Thursday, ripping open trash bags in search of anything of value. She said she spends her days gathering cardboard to recycle, earning as much as 100 pesos a day if she's lucky. That covers a meager stew for herself and her child, for 70 pesos, and leaves little else to spare.

The official inflation rate is based in large part on what the national statistics service says is the total cost of 27 items in a basic food basket — a measure of the bare minimum that an extremely poor person needs to consume. Monday's update said that a monthly basket for an indigent family of four cost 719 pesos in December. That works out to 5.99 pesos per day, per person.

The IMF has lost patience with these numbers after urging Argentina for years to improve this consumer price index, which lost credibility in 2007 after President Cristina Fernandez's husband and predecessor, Nestor Kirchner, replaced career statisticians with political appointees. The new methodology, which has kept official yearly inflation to about 10 percent ever since, has not been fully explained, even as consumers complain about soaring costs of beef and other staples.

IMF experts and Argentine economists have spent months working privately with government officials to recommend very detailed ways to get accurate numbers again, but the government has yet to adopt them.

The IMF is now on the 12th step of a 15-point process for flagging Argentina with what IMF Director Christine Lagarde called "the red card" for countries that don't follow the rules. On Thursday, she announced that a board meeting will be held Feb. 1 to consider whether to censure Argentina and eventually suspend its voting rights and membership in the world body.

Even close government allies have given up defending the official statistics service, known as INDEC, which announced Monday that Argentina's annual inflation was just 10.8 percent in 2012. Private economists have estimated that Argentina's inflation was actually 26 percent or more, making it the worst in all of Latin America. A key indicator: Unions that have been key to Fernandez's hold on power are pushing for pay raises of 25 percent or more this year, despite a government-announced ceiling of 20 percent.

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