While Argentina’s economy inches ahead, its government continues to report “Chinese” growth rates

If you squint your eyes, it looks like growth.
If you squint your eyes, it looks like growth.
Image: Reuters / Stringer
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When Argentina’s statistics bureau (Indec) announced that the country’s GDP expanded by 3% in the first quarter of 2013, opposition leaders were livid. The number, which few outside of president Cristina Kirchner’s government believed, came during a stretch of severe inflationary pressures and poor economic activity. The country’s first quarter trade surplus shrank by $688 million, and the central bank lost $2.84 billion in international reserves in the first quarter of 2013. In response, several Argentina opposition groups joined forces to come up with their own numbers.

This week, seven lawmakers, all members of opposition groups, presented their first GDP estimate to Argentina’s lower house. Their first quarter growth findings? A paltry—if more believable—0.5%.

“In the first quarter of this year the ‘real life’ index shows that Argentina’s GDP expanded 0.5% in contrast with the 3% released by Indec (the government’s much questioned official stats office),” Federico Pinedo, one of the seven lawmakers, said. “The government insists on saying that the economy is growing, that there is no inflation and that all is fine and blooming, but all that is a huge lie, a lie that will cost the country dearly.”

Another lawmaker, Patricia Bullrich, remarked that: “The government of President Cristina Fernandez is unable to explain why after several years of growth at Chinese rates we are now in a frozen economic situation.” She added, “We as lawmakers want to reach the truth about the situation and insist upon the people the destruction that the dishonest stats from Indec mean for Argentina.”

The same group of lawmakers have been releasing their own monthly inflation estimates based on data supplied by private consultants for over a year. Until recently, they had to withstand fines to make them public.

International Monetary Fund managing director Christine Lagarde has piled on the pressure, demanding that the government produce “trustworthy and credible numbers and statistics” on economic growth and inflation by September 29.

So far, Kirchner’s government hasn’t budged. Since 2007, Argentina’s government has consistently reported inflation levels below 10%, when private economists, provincial statistical offices and surveys of inflation expectations have for years placed the figure well above 20%.

As a result, Indec stats have been deemed “non trustworthy” by the IMF, the World Bank, the  UN Economic Commission for Latinamerica and the Caribbean, and several other major international bodies. And the Economist announced last year that it would no longer publish the country’s official statistics, choosing instead to use inflation numbers published by PriceStats.

Those naysayers need a bigger stick. Threats and hard deadlines from bodies like the IMF have yet to be enforced, which has left Argentina free to continue cooking its books.