A statistical crime

Now, the Argentine province of Mendoza has been included in the list of those accusing Argentine Internal Trade Secretary, Guillermo Moreno, of rigging inflation data. Mendoza, paradoxically the district of Cristina Kirchner's vice-president candidate, Julio Cobos, was straight: it sent information to Argentine Statistics and Census Institute (INDEC), which showed an August 3.1-per cent inflation in said province. However, official press release stated it only hit 1.5 per cent. An invisible hand has been involved, and it's not precisely that of Adam Smith.

Fiction and reality: Consumer prices in Mendoza

Argentine Statistics and Census Institute (INDEC, in its Spanish acronym) and its capricious price measurement got going yesterday a new controversy, thanks to insurmountable differences between provincial and INDEC inflation levels. The Argentine province of Mendoza was the one lodging a complaint this time, asking INDEC to explain why it had disclosed an August CPI increase of 1.5 per cent instead of the 3.1 per cent it had sent.

The controversial figures were published at Monday midnight, with almost seven hours of delay. The entity disclosed that National CPI had hit 0.8 per cent in August against July, accumulating a 6.8-per cent rise in the year, higher than 5 per cent for Buenos Aires city and Great Buenos Aires.

This complaint arose yesterday from the Economic Research and Statistics Board (DEIE, in its Spanish acronym) and it's the first formal protest of a province to INDEC. Mendoza asked in a written document to "rectify and ratify information disclosed on September 24 about Mendoza's national CPI, which showed a 1.5-per cent variation" between August and July. In turn, the district claims that "information revealed does not coincide with that received by this board on September 24 at 4.20 p.m. and 9.40 p.m. by e-mail. In the latter, a 3.1-per cent variation is informed," the same percentage estimated by Mendoza itself.

Although the province has not received an explanation yet, sources attribute this change to application of a new practice, which has become a habit in INDEC, intervened since January by Argentine Internal Trade Secretary, Guillermo Moreno: trimming sharp hikes. Since then, marked differences have been observed with Mendoza and San Luis measurements, provinces which have not accepted to change their methodologies.

Food and Beverage

The main "retouch" made on Mendoza's inflation is observed in "food and beverage" area. INDEC shows a 2.2-per cent hike in August against 5.6 per cent by DEIE. In turn, in "clothing" area, the national entity reports a 0.5-per cent low, while Mendoza shows a 1.5-per cent increase.

Controversy between Mendoza and INDEC becomes stronger at the political level, since it involves the district commanded by Julio Cobos, Cristina Kirchner's vice-president candidate. Mendoza administration denied yesterday "being pressured" by national government and it put it straight that INDEC is responsible for processing data sent by the province. It's worth mentioning that, in July, also amid conflict about different inflation measurements, Cobos defended before Argentine President Néstor Kirchner provincial methods.

In turn, clash over national CPI goes beyond Mendoza, since several provinces have also claimed great differences with INDEC. For example, San Luis is in the list of the eight districts included in official measurement. August rise there hit 3.3 per cent, the highest of Argentina, against 0.4 per cent of Buenos Aires city and a general average of 0.8 per cent. "We don't have more inflation than the rest. The difference is that we tell the truth," San Luis Statistics and Census manager, Adrián Garraza, stated. "The 'secret' is in shop prices, rather than in agreements between government and businessmen," the official Rodríguez Saá satirized.

Other examples can be found in Tierra del Fuego, where the cities of Ushuaia and Río Grande posted an increase of 5.6 per cent and 4.8 per cent respectively. In addition to this, we have La Pampa, with a price rise for the entire year hovering around 15 per cent and 28.6 per cent , against INDEC's 7.2 per cent for the metropolitan area of Buenos Aires. Meanwhile, in Salta, unofficial data show a monthly inflation above 3 per cent.

What happened with Mendoza adds to inflation controversy reinstalled in government since the head of Argentine Central Bank, Martín Redrado, admitted being concern about price pace. The official was punished by Néstor Kirchner and Cabinet Chief Alberto Fernández stated on Monday that "Argentina has no inflation."