Confused about what’s going on in Argentina? If so, don’t fret – you’re not the only one.
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Eat humble pie? Not a crumb. After lying about inflation for seven years, Buenos Aires last night revealed a new and more credible statistical series. This, said Axel Kicillof, the economy minister (pictured), was not because the old inflation numbers were wrong. Rather, it was because they needed to be updated. Why? Because Argentine consumption habits had changed, he explained. The government’s new inflation numbers, he added, provide “an X-ray of another country.”
Move over Repsol. The government in Buenos Aires is now directing its stinging verbal attacks at Shell.
After Argentina devalued the peso, consumer prices have begun to rise – a logical consequence. Or not – Cristina Fernández, the president, likened retailers and suppliers that have hiked prices to pilferers on Tuesday night.
And her ministers have taken specific aim at Shell, the oil company also accused by Axel Kicillof, the economy minister, of a “speculative attack” on the peso during its preliminary dive on January 22.
A timely new poll has come our way, commissioned by Graham Fisher & Company for the Emerging Markets Trade Associations, a collection of investors focused on debt. Poliarquía Consultores asked 1,000 Argentinians for their views on the economy, the problems facing the country and president Cristina Fernández de Kirchner.
Tough times for consumers in Argentina. Thanks to a 35 per cent tourist tax, many are swapping the white sands of Uruguay and Brazil for local beaches during January’s summer holidays (though the head of the federal tax agency found his way to a five-star hotel in Rio).
The bibs are back: printed with the slogan “we monitor the prices” and worn by young pro-government activists, the foot soldiers of Argentina’s losing battle against soaring inflation.
After announcing the measure alongside its bibbed army of supporters, the government implemented a new set of price controls on Monday, a precursor to its annual war with union leaders over wage rises.
Guillermo Moreno is at it again. Argentina’s business community lives in perpetual fear of receiving a telephone call from the government’s notorious commerce secretary. But he reserves special treatment for economists.
This time it is the turn of Orlando Ferreres to be investigated, after he had the temerity to publish an inflation index that differed drastically from the government’s widely-questioned figures (he thinks prices are rising more than twice as fast).
Picasso famously had his blue period. Argentina has its blue dollar – as the black market exchange rate is known. And that’s good news for art collectors and visitors to the ArteBA art fair which kicks off this week.
What’s that phrase? If you’re in a hole, stop digging?
Hernán Lorenzino, Argentina’s economy minister (left), abruptly terminated an interview with a Greek television journalist, Eleni Varvitsioti, after she pressed him on the tricksy issue of inflation in Argentina.
Argentines would love to save in dollars rather than a peso ravaged by inflation and whose value is on the skids, but the government won’t let them.
Demand for gold – another traditional safe haven – has surged. Banco de la Ciudad, the only bank to sell to individuals, says it can hardly keep up.
So … Enter the bitcoin? The virtual currency is emerging as the latest inflation refuge – and Bloomberg reports that TradeHill, a US-based bitcoin exchange, is now planning to open an office in Argentina where demand is fastest in the region.
The possibility of supermarkets only accepting a new supermarket credit card (valid for use in all big chains, the thousands of Chinese-run neighbourhood stores, some electronic and white goods retailers and even petrol stations at YPF, the state oil company) sparked a slew of headlines over the weekend in Argentina.
The idea came up last Friday at a meeting with Guillermo Moreno , the internal trade minister.
It’s an impression reinforced by Rabobank’s latest Argentine agribusiness outlook. Argentina’s farming sector, which makes up nearly 60 per cent of total exports ($47bn in 2012, and that was a bad year because of drought), is a key economic breadwinner, bringing home the dollars that are essential to an economically choppy country still with debt in default and cut off from international capital markets.
Inflation-hit Argentina has just agreed a new round of price freezes with major supermarkets, neighbourhood stores and white goods retailers until April 1.
This week, Moody’s Investors Service downgraded its outlook for Argentina’s B3-rated peso and foreign-currency government debt from stable to negative, suggesting a full-blown downgrade may not be far away. The government couldn’t agree less.
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