It is an open secret that, since 2007, the government has deliberately lied about inflation rates. Non-governmental statistics and provincial statistics indicate that the real rate of price increases has been about three times what government figures indicate. Those figures, once factored into real GDP, show that Argentina’s GDP growth was as low as 0.5 percent, belying exaggerated reports of 10 percent growth.
To temper the bad news the president also announced a 200 percent increase in education subsidies to families that earn less than 30,000 pesos. This payment, which averages 813 pesos, affects 1.9 million households at an annual cost of 1.56 billion pesos, a paltry amount, in comparison to the 140 billion pesos in energy and transit subsidies to be slashed.
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The government has launched a demagogic campaign of shaming supermarkets that raise prices excessively; the president has met with housewives who participated in the campaign. The Peronist youth movement La Campora has been enlisted in this project. The program is ineffective; prices for staples, such as flour, bread and fruit continue to rise. The price of bread in 2013 increased 105 percent, dragged up by a whopping 170 percent in the price of flour. Many of the poor find themselves unable to afford domestically grown apples and citrus fruits.
It is very possible that 2014 will see the beginning of hyperinflation in Argentina (monthly price increases of 50 or more percent), devastating those with fixed incomes. Income for pensioners and those that depend on government handouts are adjusted every six months on the basis of figures from a year before.
