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2010-04-21

In Argentina, when will inflation stop?

By Guillermo Feres Castillo for Infosurhoy.com—21/04/2010

Argentina could experience the highest inflation worldwide

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Argentines are met by inflation every time they go to the supermarket. (Courtesy of Télam)

Argentines are met by inflation every time they go to the supermarket. (Courtesy of Télam)

BUENOS AIRES, Argentina – Economic inflation has not reached the chaotic scale of 1989, which contributed to the fall of former President Raúl Alfonsín’s administration, but several warning signs have appeared.

Inflation has increased so rapidly in recent years the country could have the world’s highest inflation rate if it reaches the 40% forecast by economic experts. Venezuela and the Republic of Congo topped the International Monetary Fund’s global inflation ranking in 2009, with Argentina third.

In recent years, the Argentine government has not revealed all of the data collected by its national statistics and census institute (INDEC), which documents inflation. Instead, the government just releases its final number, which is often much different than the consensus of independent economists.

In March, the government reported the consumer price index inflation was 1.1%, but many economists claimed the “real” figure was 2.3%, more than double.

An average family, which is defined by the INDEC as a husband, a wife and two children, can meet all monthly expenses with only $1,150 pesos (US$297.60). But experts claim the cost of living is three times higher than the government’s figure.

“This cannot go on, this is madness,” said Beatriz Castillo. “Every time that I go to the supermarket, I see that prices have gone up, and I always return to my house with fewer products than I had bought the time before. Money buys less, and I do not know how it is going to end.”

Castillo lives with her 33-year-old son, who cannot afford to buy or rent a house because of the soaring prices for real estate and the difficulty to be approved for a loan.

Carmen Santana, who is a manager at Por una Argentina con Mayores Integrados (PAMI), which works with the elderly, said she’s had to change her spending pattern.

“Despite the fact that I receive a salary that could be considered good, in my family we have already made a cut so we only buy essential items,” she said. “Before I would frequently go out to eat with my husband and the children, but now we only do it once per week or every two weeks.”

Santana, however, won’t let money stand in the way of her kids’ lifestyle. “My children still go to a private school and take English classes,” she said. “I also don’t want to stop them from being able to go to the [athletic] club, where they play basketball.”

The poor also are suffering, as the government often can’t provide needy families with the financial assistance to offset inflation.

The government’s recent implementation of the universal allocation for the social protection of children (Asignación Universal por Hijo para Protección Social ), an initiative to provide money to unemployed parents with dependent children, appeared to be a step in the right direction.

But the government’s monthly $180 peso stipend (US$46.50) isn’t enough to pay for a family’s basic needs because of inflation, causing residents to request the government increase the funding to $300 pesos (US$77.60).

“It is certain that this money helps us, but it is less all the time because things increase every week,” said Norma Vera, an unemployed mother of four who lives with her husband in the poor neighborhood of La Matanza. “And to make matters worse for families such as mine, it is the only fixed income we have. This is why my husband, who does not have a stable income, has to do some carpentry work in order to bring more money into the house.”

She said her family’s situation is dire.

“We are only surviving,” she said. “I hope that the government quickly increases the amount of the subsidy for us or that my husband or I can find better employment.”

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1 Comment

  1. eleuterio gouveia sousa 04/30/2010

    your newspaper is wonderful. We need a report like yours in our America.

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