Economy Minister Hernán Lorenzino delivered the 2013 budget proposal to Congress today, giving the nation a peek into the executive branch’s vision for the coming year.

The proposal predicts an exchange rate of $5.10 to the dollar, growth at 3.4%, and growth in investment at 7.4%. The official inflation rate is estimated to hit 10.7% by the end of 2012 and 10.8% in 2013. Tax revenue is expected to total over $822bn, a 22.7% increase from 2012, reflecting at least in part, a rise in inflation. The trade surplus, according to official estimates, will be more than US$13bn.

The current policy of paying off foreign debt with reserves will be continued up until US$7.8bn. This cap exceeds the US$5.7bn paid in 2012 by 40% and 2011’s US$7.5bn by 5%.

Agustín Rossi, Congressional Head of the Frente para la Victoria (FPV), the same party to which President Cristina Fernández de Kircher belongs, was optimistic about the proposal. He applauded the continuation of “social investment” and debt reduction, and commented that the proposal used a “level of reasonable expectations” for growth. He predicted the Budget and Treasury Commission would begin to consider the proposal next Wednesday and that by late October, the congressional Lower House would have approved it and passed it to the Senate.

Argentina is adding another notch to its expropriation belt, this time with money printing.

Following a quick series of debates and decision-making in Congress, the Argentine state became the brand new owner of the Compañía de Valores Sudamericana (CVS), formerly Ciccone Calcográfica. The acquirement of this mint puts the responsibility of peso printing in the hands of the government, declaring minting to be a matter of national interest.

“The state considers recovering the capacity to print the nation’s money to be of prime importance,” said the governmental document released upon announcement of the expropriation plan.

Congress debated taking over Compañía de Valores Sudamericana (CVS) (Photo: Pedro-Ignacio-Guridi)

The law appears at a time when vice-president Amado Boudou is in the spotlight for a scandal involving the ex-Ciccone. A federal judge is investigating Boudou for allegedly helping the company out of bankruptcy last year. Influence peddling, illegal enrichment, tax evasion, and money laundering are at the forefront of the accusations.

The timeliness of the expropriation has opposition outraged, saying the nationalisation of the mint is only a means of protecting Boudou. Meanwhile, the government is in a race against inflation.

The Bill, and a Story

On the 7th August, Minister of Economy Hernán Lorenzino and head of the CVS mint, Katya Daura, led a 60-day intervention of CVS, simultaneously announcing a bill to expropriate the company.

The expropriation makes CVS, which prints sensitive material such as bank notes, the second money printing company owned by Argentina. La Casa de Moneda prints peso notes, passports, stamps and official forms.

Lorenzino said the intervention was meant to “protect workers’ rights” as well as to keep the company going. He added that the government’s intervention of the company will “ensure the sovereignty of the state in the production of security papers”.

The bill entered its first day of debate in the Congress on 8^th August. Just ten days later, following a debate presided over by Boudou in his role as president of the Senate, the upper house passed the bill with a vote of 44-20. A week later, on Wednesday 22th August, the bill was passed into law by the Chamber of Deputies, by 145 votes against 77.

Frente para la Victoria (FPV) Senator Aníbal Fernández said that 'is to recuperate sovereignty in the printing of legal tender.' (Photo: Santiago Trusso)

Frente para la Victoria (FPV) Senator Aníbal Fernández spoke about the government’s purpose of expropriating CVS, saying it “is to recuperate sovereignty in the printing of legal tender.”

And now, full ownership of CVS will be handed over to the Argentine state, in turn cancelling the company’s tax debts, recovering its property, and converting the company’s employees to government workers.

Employees will retain labour rights, union affiliation, and their collective bargaining agreement.

The price to be paid for CVS will be decided, as in previous instances, by a valuation tribunal. However, the plan is to take into account the $250m in debt owed to tax agency AFIP. Because the amount is higher than the value of CVS’s assets, Lorenzino said he expects the expropriation will not cost the state any money.

According to the expropriation law, Lorenzino and Daura will be in charge of the mint. The two are known to be close allies of Boudou, raising potential complications and questions about the Boudou investigation’s overlap with the expropriation.

Judicial sources told local newspaper Infobae that the expropriation will not affect the investigation of Boudou and others.

The issue of Boudou’s alleged involvement with the company featured prominently in the parliamentary debate. Swaying from the opposition, senator Luis Juez, member of the Frente Amplio Progresista (FAP), voted in favour of the bill, saying, “there is no reason why the prosecutors and judges cannot get to the bottom of the matter.”

FAP submitted a similar expropriation bill in April, as did the Union Civica Radical, both of which voted against the expropriation in Congress.

Opposition has been resonant in recent weeks, with dissident Peronist deputy Eduardo Amadeo saying, “the measure shows its need to cover up a million-dollar case of corruption.”

Deputy Patricia Bullrich of the Unión por Todos party, believes the seizure of CVS is meant to protect Boudou.

“Because Boudou bought the company through figureheads (people who conceal these kinds of purchases by government officials) and today this purchase is so evident, that the government can’t find a way to continue covering the scandal. It wants to do it by purchasing silence,” she said in an interview with the Argentina Independent.

Santiago Drangosch, a member of the Partido Liberal Libertario, says the situation is like “a script for a movie.”

Drangosch, who is against the expropriation, saying it goes against property rights and the constitution, questions what will happen with the debts Ciccone owes, and believes this decision is the “final destruction of all that’s institutional”.

The Case

In a case nicknamed by the press as ‘Boudougate‘, vice-president Boudou found himself in a financial scandal with ties to shell company The Old Fund and the ex-Ciccone press.

‘Boudougate‘, vice-president Boudou found himself in a financial scandal with ties to shell company The Old Fund and the ex-Ciccone press. (Photo: Itupictures)

According to a timeline report in La Nación newspaper, in July of 2010, a judge requested Ciccone’s bankruptcy following the company’s severe debt. In September 2010, The Old Fund gave the company $2.3m to rise out of bankruptcy. In turn, The Old Fund’s president, Alejandro Vandenbroele, became president of the ex-Ciccone.

The scandal came to light this February when Vandenbroele’s ex-wife told the press that Boudou was part-owner of CVS. Boudou denied associations with or knowledge of Vandenbroele, though it was later found out that Vandenbroele had paid some bills at an apartment of Boudou’s in Puerto Madero, leading to suspicions that Vandenbroele was living there.

As evidence and information began to leak, more instances of a monetary relationship between Boudou and The Old Fund began to reveal themselves. In 2010, The Old Fund supposedly paid for several trips for Boudou’s friends, including a trip to the World Cup in South Africa for Boudou’s friend and Vandenbroele’s business partner, Jose María Núñez Carmonia, and a trip to the United States for Boudou’s brother.

When Boudou joined Cristina Fernández de Kirchner as vice-presidential candidate in the election race, their party, FPV, allegedly paid $1.9m to CVS to print primary election ballots, and $2.9m for the presidential election ballots in October.

A written report presented by prosecutor Jorge Di Lello accuses the vice-president of a “vertiginous and unjustified increase in personal wealth,” while Boudou was economy minister from July 2009 to December 2011.

President Fernández has not made any comments regarding the matter, and has stood by her cabinet.

In the bill to declare the company “of public interest and subject to expropriation,” the government did not mention the scandal, or open files in business and criminal justice.

Boudou denies allegations saying he is the victim of a “media and judicial conspiracy.”

Money in Argentina

Until recently, Argentina’s state-owned mint, Casa de la Moneda, administered by the Ministry of Economy, was solely in charge of printing Argentina’s paper money.

One of the badly printed 100 peso notes from Brazil (Photo: nachoherrera)

In November 2010, following a rising inflation that unofficial sources placed at 25% annually, and an inability to keep up with the demand for pesos, Argentina sought temporary help from Brazil’s Casa da Moeda mint. The company printed 130 million $100 notes, and another three billion $100 notes the following January. This was the first time Argentina sought help from Brazil in regards to money printing.

Despite the scandal surrounding CVS and Boudou, the Central Bank of Argentina went ahead in March with contracting CVS to print money. The first CVS-produced bank notes were released this May.

Though the possibility of printing $200 bills has been presented, President Fernández and the government have refused to print bills of a higher denomination. Critics say it is because there is a denial of inflation, and a fear of soaring prices reminiscent of past hyper-inflations.

“It’s because of inflation that people require more bills,” says Maximiliano Castillo, who is the director of economic research company ACM in Buenos Aires. “The government doesn’t want to print bills of higher denomination.”

Supporters of the new law believe the government makes a valid point with the expropriation. Senator Fernández said control of the printing is something “the state should have never given away.”

Instead of Argentina now working with both a state-owned and a private company, it is expected that the Casa de la Moneda will absorb CVS and its resources, resulting in one state-owned mint to cover all of the country’s currency printing needs.

Across the world, countries have various means of currency production, some relying on state-owned companies, others on private companies, and yet others on a mix of both.

Australia’s state-owned Note Printing Company prints the country’s own polymer banknotes, as well as some banknotes for countries like Chile. Meanwhile, in Canada, two private companies — BA International Inc and Canadian Bank Note Company — produce bank notes, and the state-owned Royal Canadian Mint produces coins. In the United Kingdom, the Bank of England plus seven retail banks are capable of printing banknotes.

Bullrich speaks to the opposition’s standpoint saying, “The state already has a company to make money, why would it need two? I see nothing positive in buying a company to perform a function that is already met by another company.”

Meanwhile, Senator Fernández said, the purpose of the expropriation was to “avoid that business that should be handled by Argentines, be handled by others.”

What do Argentines think about the expropriation of CVS? Click here to find out.

This morning, former presidents of the Central Bank Martín Redrado and Alfonso Prat-Gay responded to President Cristina Fernández de Kirchner’s speech yesterday, in which she criticised the two men.

While inaugurating a new washing machine factory in Haedo with Buenos Aires Governor Daniel Scioli yesterday, President Fernández defended her policies and offered strong critiques of her detractors, among them Prat-Gray and Redrado.

Fernández criticised Prat-Gray, currently a senator and part of the Coalición Cívica, for his recent comment that Vice Minster of the Economy Alex Kicillof was still “sucking his thumb” when Prat-Gray was president of the Central Bank.

The president responded that Kicillof “is not a child.” Alluding to Prat-Gray, she stated, “there are people who are really sick with their own importance,” and suggested he was forced to leave his post because he “fought with the minister of the economy.”

In an interview with La Red today, Prat-Gray replied that the president’s critiques were “great praise”, and stated that former president Néstor Kirchner had invited him to continue in his position when his term ended, but that he had turned down the offer.

What’s more, he declared that Argentina has entered a “recession with very high inflation” and that “this combination is lethal.” He also criticised the president’s speech itself, stating “it worries me that she spends her time on me when there are other things to do. The speech yesterday was an effort to deny that these problems of inflation and the recession do exist.”

The president also criticised Redrado directly, declaring that in a conversation that the two allegedly had in 2009 when he was the president of the Central Bank, the economist over estimates the foreign trade surplus two-fold.

Speaking with Radio Mitre today, Redrado countered that this conversation never happened, and stated, “I am surprised by the degree of [the president’s] confusion.” He further accused the president of being “tied to the past” and “trying to create a new history.”

He countered that the figures that the president was referring to were actually the results of the Survey of Market Expectations (REM), a study organized by the Central Bank that had included the input of 50 economics institutions. He further stated that his “role as president of the Central Bank was never to make projections”.

In yesterday’s speech, President Fernández also criticised the media, stating that there was a “national channel of fear and despondency” that would not report on positive events such as the factory opening. Her statement comes after several groups have criticised her own use of the national public channel in recent weeks.

Redrado replied to this allegation by declaring, “There is no channel of despondency: the economy is worse and the people are worse.”

Moyano chaired his first meeting as re-elected leader of the CGT today and announced his intention to create a new national office of statistics.

INDEC is the agency responsible for the collection and processing of statistical data. It also monitors the heavily contested inflation rate as well as other key figures like unemployment.

“We’re going to do this properly, not like Moreno did” Moyano said today, referring to the domestic trade secretary, Guillermo Moreno.

“We are going to create our own INDEC. We’re not going to rely on the supermarket shelves. We’re going to measure properly, as normal,” he said as he entered the first meeting of the new board.

Statistics in Argentina are heavily debated and INDEC’s inflation statistics remain substantially lower than estimates from the private sector. According to La Nación, INDEC’s June estimate of 0.7% was less than half the figure proposed by a private consultancy, released by Congress two days ago.

Moyano’s announcement of his intentions to create a new, objective INDEC came this morning to waiting press. He also took the opportunity to hit out at his critics this morning, following his controversial re-election on 12^th July. Despite mounting issues within and outside the CGT, Moyano went ahead with the election proceedings as planned, further polarising the divide between pro and anti government factions.

Minister of labour Carlos Tomada declared the elections null and void and anti Moyanist factions within the CGT have stated plans to hold a separate election on 3rd October.

When asked about fractures in the CGT, Moyano said it is nothing new; “we’re going to have a Balcarce CGT and an Azopardo CGT,” he said.

Tax Office AFIP (Photo: Maia Worsnop)

There is a saying repeated daily on the streets of Buenos Aires: “Every ten years there is a crisis in Argentina.” Today’s economic climate is nothing like that during the last meltdown, in 2001-2 but for some, the strict currency controls imposed by the government look like the new beginning of an all-too-familiar ending,

Barely a week after President Cristina Fernández de Kirchner’s emphatic re-election in October 2011, the government introduced new measures regulating foreign exchange, ruling that all purchases of foreign currency must first be approved by the tax office, AFIP.

Amid confusion and mounting criticism, then economy minister and vice-president elect Amado Boudou declared that the purpose was simply to clamp down on money laundering and tax evasion, particularly by large banks and businesses. It was the origin of the funds in question that needed to be justified, said Boudou, not how they were used. “Only those in the black informal economy should be nervous,” he added.

However, eight months later, anxiety has spread as everyone finds changing pesos – typically into dollars – increasingly difficult. Since 29th May, those travelling abroad have had to provide details about where they are going, when, and what for. And on 15th June, AFIP changed its online petition form, contradicting Boudou and forcing people to specify the goods or services for which they require dollars.

With legitimate channels blocked, demand at unofficial change houses, known locally as “cuevas” (caves), soared, sending the parallel exchange rate (“dolar blue”) to over $6, a premium of 40% over the official exchange rate. Jittery investors have withdrawn some $5bn, around a third of all private-sector deposits, from their dollar-denominated bank accounts.

Meanwhile, the real estate market, which operates in dollars, is practically paralysed. “People who have dollars are keeping hold of them after seeing how difficult it is to obtain more,” says José Diaz Ortiz, architect and real estate developer in Buenos Aires. “Only people really desperate to sell are moving in the market.”

Dollar Addiction

Exchange Rates as of the week of June 25, 2012 (Photo: Maia Worsnop)

This level of panic might seem strange in an economy riding on the back of an unprecedented decade-long boom, and one in which, according to Central Bank data, only 11% of the population actually buys dollars.

However, Argentines have a special relationship with the dollar, which is seen as a safe haven after decades of economic instability. For a decade after 1991, the dollar was legal tender and used interchangeably with pesos, and even after the mega devaluation in 2002, estimates today suggest Argentina still has one of the highest number of bills in circulation outside of the US.

For some, the affiliation with the dollar in Argentina extends beyond economic logic. As economist Ricardo Aronskind writes in Página 12: “[since 1975] the dollar has become not only an easy to access asset that maintains its buying power, but something more sociologically meaningful: a secure oasis in a country where there were no guarantees on the political or economic horizon.”

In this context, the reflex response to any sign of economic uncertainty is to stockpile dollars. The country’s economic fundamentals are more solid today than they have been for many years, but growth is now slowing and warning signs are evident. Import restrictions and the phased withdrawal of energy subsidies are measures designed to protect shrinking trade and budget surpluses, respectively. The Central Bank’s dollar reserves are substantial, at over US$46bn, but they are down 10% since peaking at last year, and another US$5.6bn are earmarked in the budget to write down debt in 2012. Almost half of that is due in August, as the government pays holders of the BODEN2012 state bond, issued, ironically enough, ten years earlier in the aftermath of the crisis.

However, at the core of the problem is inflation, which has been running at 20-25% for several years, according to private estimates (official figures are lower but widely discredited). Conventional economic wisdom dictates that a rapid rise in domestic prices make it harder for local businesses to export goods and services. The orthodox counterbalance is currency devaluation, something those now chasing dollars are speculating on but which would generate more inflation, make dollar debt payments more expensive, and hurt those who rely on imported goods.

The government says powerful minority groups with vested interests are trying to force a devaluation by moving money abroad or stockpiling goods meant for export, thereby reducing the supply of dollars in the local market and putting pressure on the peso. These groups, says the government, play on the fears of ordinary savers by spreading doomsday predictions with the help of opposition media.

Its response has been to toughen currency controls and clamp down on black market operations. Illegal currency exchange houses in the centre have been shut down, and sniffer dogs have been deployed at border points to prevent excessive sums of dollar bills leaving the country.

At the same time, officials are appealing on the public to support the country’s “monetary sovereignty”, with President Fernández de Kirchner declaring that she would set an example and convert her dollar savings into pesos. Cabinet Chief Juan Miguel Abal Medina expressed the government’s new official line in his progress report to the Senate: “We need to start thinking in pesos and begin a process of de-dollarisation in the economy.”

Exchange House Metropolis (Photo: Maia Worsnop)

Shock Therapy

Another economist and journalist, Alfredo Zaiat, supports the government’s efforts to crack down on speculation, though says the use of “shock therapy” against what he calls a nation’s obsessive compulsive disorder with the dollar is counterproductive.

Zaiat writes: “When treating alcoholics, the therapy is gradual to avoid fits of desperation caused by total abstinence. Tackling the ‘dollar addicts’ with the same shock treatment has created an exaggerated climate of economic uncertainty.”

Though the tough policy has reduced capital flight and stablised Central Bank reserves, a lack of coordination and transparency have only increased public suspicion and concern, which adds more pressure for devaluation.

And government reassurances have only a limited impact on those who remember similar promises from previous administrations. Though today’s political and economic circumstances are vastly different, hard lessons learnt are not forgotten, and when high-ranking government officials talk about “thinking in pesos”, the reflex response of many is still to bet on the greenback.

As Zaiat concludes: “The immense task of increasing monetary sovereignty requires precise and calm information, regulations over currency exchange that are respected, and explications over the availability of currencies, debt commitments, and local and international economic conditions.”

The dream of monetary sovereignty is shared by many, but imposing it by force looks liable to backfire. And though Argentina´s economic conditions are not indicative of an inevitable crisis, if enough panic is generated, the “every ten years…” prophecy can yet become self-fulfilling.

“Argentina has a special love for the dollar, which would be good to eradicate,” says Diaz Ortiz. “But this will be impossible to change while there is inflation and no confidence in the local currency.”

The conclusion of the 38th Congress of Tourism and Travel agencies, AAAVYT found that tourism to Argentina is rapidly declining. The country is becoming increasingly expensive with inflation adding to the international financial crisis.

According to the latest statistics, presented at the congress, the number of foreign tourists arriving in the city of Buenos Aires (by air) in the first four months of the year was 936,000 – 3.1% less than the same period a year ago. In April, the fall was 5.6%. The number of Brazilians, which have become the main source of tourists (30%), dropped 8.8% in April over a year ago.

Mario Lielman, chair of the Buenos Aires Tourism and Travel Agencies Association stated, “Inflation, even high, has not been enough to counter the appreciation of the Argentine peso and tourist think twice before planning a trip. Likewise for Argentines, a strong currency and more accessible prices in the US and Europe have become a magnet.”

Domestic flight costs are on the rise after an increase this week of between 10% and 20%, with longer distance flights rising by 30%. This is the case for sought after destinations such as Patagonia, Tierra del Fuego or Salta and the Iguazú falls.

These deterrents, combined with the ongoing financial crisis tightening belts globally, has worked to deal a significant blow to the Argentine tourism market.

That said, these same forces seem to be working to increase Argentine travel abroad. From April 2011 to April 2012, 31% more Argentines have travelled overseas.

Senetor Aníbal Fernández today declared he regretted his comments admitting he had American dollars saved during a time of government controls.

“I lost my temper, now I regret it,” the former Cabinet Chief and Frente para la Victoria leader said this morning. “I was wrong and now I realise the situation.”

His apology comes after an outburst yesterday by Fernandez while being questioned by reporters. “I save dollars because I feel its my right to do so,“ he claimed he brought dollars while it was legal, firing back at reporters questions. “I also do not want to lose money and eventually I will end up selling it.”

But Senator Fernández affirmed his belief that those who have dollars should sell “when you have the opportunity… I will sell my dollars when there is as little [money] to lose as possible.”

Meanwhile, former education minister, and economist Juan Llach came forward this morning criticising the government policies on the dollar.

Llach spoke on the radio program Cada Mañana, claiming that the dollar is a “son of inflation.” He criticised the government and the measures they have taken against buying the dollar.

“The government’s diagnosis is not very good. The cultural problem is inflation, not the dollar.” Llach also complained that barriers to international importations are “slowing economic activity.”

As the controversies raged back in Buenos Aires, two Argentines were found crossing the border at La Quiaca in Jujuy with $135,000. The two suspects admitted the money was to buy dollars in the Bolivian city of Villazon over the border.

After ‘The Economist’ magazine published a February article heavily critical of the National Institute of Statistics and Censuses of Argentina (INDEC), the organization responsible for calculating the Consumer Price Index (IPC) has acknowledged using dated statistics in its 2012 assessment.

In April, INDEC released its figures for March 2012, publishing rates that private stats agencies argued were less than half the real rate of inflation this year. Similarly, for the period of April 2011 to February 2012, privately commissioned reports placed inflation at 18.3%, while INDEC’s figure was 7.9%.

Today, a group of INDEC workers grouped in the Association of State Workers (ATE) released the list of prices used to calculate the country’s Consumer Price Index, revealing that the figures reflect prices from 2008.

According to INDEC’s prices, for example, a kilo of bread costs $3.80; an asado, $12.60; a whole chicken, $4.60.

If these numbers were accurate, official inflation would have risen just 3.5% in 2012.

At most supermarkets and butcher shops, however, prices for the same goods were significantly higher. The asado cost $39.90 per kilo and the whole chicken cost $10.90.

Though INDEC lists inflation for the month of April at 0.8%, and 3.5% for the year, the revelation by the ATE workers further discredits Argentina’s official reports on the value of the peso for consumers.

In an attempt to ease a tense standoff with yerba mate producers, the Argentine government confirmed today that the fixed price of yerba mate at the beginning of the producing chain would be $1.70 and would not include VAT.

In the past days, yerba producers had expressed their anger at the news that they could have been required to pay VAT on the yerba, threatening to block streets to inhibit the product’s distribution.

The National Institute of Yerba Mate (INYM) confirmed today that the prices established for the crop of yerba mate is $1.70 for a kilo of green leaf and $6.90 for the semi-finished product, as President Fernandez had previously announced in a speech.

The clarification came after what was described as a “confusing” circular from the Ministry of Agriculture’s Office was made public. The circular reported that the prices ​​mentioned for the gross product included VAT.

Producers of the yerba, mostly from the northern province of Misiones and Corrientes, sternly rejected an alleged plan of the Agriculture Secretariat to have the fixed price of the product already including VAT. Luis Prietto, president of the National Institute of Yerba Mate (INYM), recalled that agriculture prices in Argentina have always been VAT free.

Producers have blamed Interior Commerce Secretary Guillermo Moreno for the new dispositions delivered last week to the INYM.

Argentine law fixes yerba mate’s prices, so producers can’t modify its price according to the real inflation rate. Mate manufacturers claim the introduction of VAT on the yerba will reduce their profit margins that have already been eroded by governments’ trade limitations.

In recent days, the price of the highly popular mate has experienced an increase ranging from 50% to 100%, directly impacting the Argentine consumer. Local consumption reaches nearly 260 million tonnes, while exports average around 38,000 tonnes annually, and are primarily destined for Syria.

The controversy surrounding the mate came before the price increase, when the herbalists of the province of Misiones asked Moreno a renegotiation of the price of the grass. The Secretary’s response, however, was negative.

Because of an agreement signed between Agriculture Minister, Norberto Yauhar, yerba mate values have been fixed for this year’s harvest at increased $1.70 a kilo of green leaf and $6.90 roasted sprouts start the dryer, which increased from 88% round. Prices were supposed to increase in 2013, not in April 2012.

Interior Commerce Secretary Guillermo Moreno criticised Yauhar on the decision, and after a meeting with the country’s main producers established an average price for the finished product of $10,50. This sets the price for a kilo of yerba between $16 and $18 per kilo on supermarket shelves.

Small producers and millers believe that Moreno conducted the scheme to reduce the price increase Yauhar had permitted to the primary sector in late March.

Although Moreno agreed with some producers to reduce prices for this product, he threatened to close the export to curb shortages, as well as shutting those businesses speculating on mate price.

The representative of the Government of Misiones at INYM, Ricardo Maciel, pointed out that “this is a move of the big industrials joint with Moreno and big chain stores”.

“We will be ruthless with those who speculate in mate,” Yauhar said two days ago, and asked consumers to report on excessive prices charged at some stores.

Consumers’ associations denounced that a kilo of yerba mate can now be found in stores for some $50, while before April its cost was around $12. Business-oriented newspaper Ambito Financiero reported today that yerba mate has become cheaper to buy in Europe or Mexico than Argentina.

Published government official rates of inflation for March 2012 have been estimated as less than half of those calculated by private statistics agencies. Data released today by the National Institute of Statistics and Census (INDEC) showed the wide disparity between official and private figures.

According to INDEC, prices went up only by 0.9% in the last month. On Thursday, however, opposition deputies showed a different inflation rate (2.31%, almost one point more than in January and February) based on studies commissioned to private consultants.

Similarly, privately commissioned reports show that the accumulated inflation figure between April 2011 and February 2012 is of 18.3%. The official INDEC had put the figure at 7.9% instead.

Referring to the price of one of the goods Argentine care most about, the price of yerba mate, sky-rocketed from the 1^st of April (+100% in some cases). Opposition deputy Eduardo Amadeo, who yesterday presented the inflation report said, “The increase of the price for the yerba shows that sitting on prices is a gamble that won’t pay off, because behind each product sold at a controlled price there is a producer who is losing money.”

Last February, the London-based publication, ‘The Economist’ magazine, published a very critical article against INDEC, hinting that the organisation has become politicised as a result of the country’s relatively recent history with hyperinflation in the late 1980s.

“Almost no one believes [INDEC]” wrote the Economist, adding that it would no longer use official statistics from INDEC because of the discrepancies between reported inflation figures and the reality of inflation with the Argentine peso.

The statistics agency also released the Consumer Price Index, the System of Wholesale Price Indices and the Index of Construction Cost. In addition, it disclosed data about prices of the so-called Basic Food Basket and Total Food Basket, marking the level of homelessness and poverty in the country.