Argentina’s INDEC Under Fire Again

Argentine government statistics agency INDEC released December inflation figures amid a bomb threat Monday. Its optimistic read was immediately called into question by analysts. The official line is that inflation is just 8.5% for 2007, down from 9.8% the year before. “The official data likely continues under-estimating true inflation trends,” says Goldman Sachs. “According to proxy indicators (e.g., tax collection and supermarket sales data), actual inflation hovered at 16% to 20% in 2007, more than doubling the official print.” It adds that price rises pose a major policy challenge for the authorities in 2008 but predicts a pullback to 11% inflation in 2008 on the back of tighter fiscal policy. The headquarters of INDEC was evacuated Monday due to a bomb threat, according to Dow Jones, citing an INDEC union official.