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Inflation report in Argentina fuels distrust of officials

By Michael Warren

Associated Press

Published: Thursday, Jan. 17 2013 11:12 p.m. MST

Pepe Gonzalez works at a restaurant offering barbecue for two people for 70 pesos in Buenos Aires, Argentina, on Thursday. The nation's currency's official rate is 4.96 pesos per US dollar, and the black market rate is about 7.50 pesos per US dollar.

Associated Press

BUENOS AIRES, Argentina — 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.

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 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.

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