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News: Argentina's false inflation farce

Wed, 10 Oct 07

Argentina is in uproar over allegedly falsified inflation figures, reports Reuters...

Argentine first lady and presidential candidate Cristina Fernandez de Kirchner defended the accuracy of the government's official inflation data on Monday, while shopkeepers and consumers boycott tomatoes over soaring prices.

As Argentines prepare for presidential elections on October 28, analysts, consumer groups and opposition politicians contend that data reported by the INDEC national statistics agency is about half the actual inflation rate.

"Under no circumstance is the inflation rate what the opposition says. It's the INDEC rate," Fernandez told Argentine business leaders at a lunch gathering, adding that inflation was "more than reasonable" for an economy growing more than 8 percent per year since 2003.

Prominent campaign issue

Inflation has been one of the most prominent campaign issues. In recent days, soaring tomato prices have grabbed headlines and irked shoppers, prompting a boycott by a group of Chinese shopkeepers who run about 600 small supermarkets.

"Considering that producers were charging 70 pesos ($22) per crate, and they've raised that to 180 pesos in the past week, the issue isn't just seasonal. There's a speculative component," said Miguel Angel Calvete, a representative of the Chinese supermarket owners.

Between January and September, the consumer price index rose 5.8 percent and 8.6 percent during the 12-month period.

Consumer prices to rise

But in September alone, tomato prices shot up nearly 50 percent, according to official data -- by far the biggest price increase of any staple during the month.

Fernandez, a prominent senator and one of President Nestor Kirchner's top advisors who is seen continuing her husband's economic policies, has a wide lead in the polls and is widely expected to win the election in the first round of voting.

The government expects consumer prices to rise less than 10 percent in 2007, similar to 2006, but critics say actual inflation is as high as 20 percent.

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