The resignation of Marco Lavaña, head of Argentina’s Institute of Statistics, has put inflation in the spotlight. The resignations came after Millais’ government delayed the introduction of a new inflation measure that could change this year’s numbers.
Argentina’s statistics chief resigns over delays in new inflation index
Argentina’s inflation miracle is drawing attention as a new calculation method could handicap Prime Minister Millais’ economic measures.
The resignation of Marco Lavagna, head of the National Statistical Office of Indoc, has placed Argentina’s economic reporting under intense public scrutiny after the official resigned after Millais’ government delayed introducing a new method of calculating inflation.
Argentine consulting firm Exquanti said this amounted to “data manipulation”. “By delaying the change, Mr. Lavagna supported Mr. Millais and Mr. Caputo for two years, at the cost of discrediting himself and the institute. He could not continue without endangering his position in the world of serious statistics,” the report said.
The new methodology, based on spending patterns from 2017 to 2018, would update current standards based on research from 20 years ago. Local economists say this method underestimates current spending and that utilities are more relevant today.
Nevertheless, under the new accounting system, the increase in inflation remained less than 2%, not enough to influence Millay’s “chainsaw” research. Still, the new inflation index could impact these numbers in the future, as energy price hikes scheduled for later this year will cause inflation to fluctuate significantly.
The impact of the resignation is already having an impact on Argentine stocks, with the country’s S&P Merval stock benchmark falling 8%. Analysts say this could also affect the dollar-peso exchange rate, as the currency will be subject to similar fluctuations as the monthly inflation index as it moves to floating rate.
Food and beverage prices jumped 2.5% in the first week of February, the largest weekly increase since March 2024, the report said.
read more: U.S. Treasury intervenes in Argentine currency market as President Trump ties support to Milley’s electoral success
FAQ
What is the controversy surrounding Argentina’s inflation calculations?
The recent resignation of Indec’s Marco Lavagna has heightened concerns about possible data manipulation in the country’s inflation calculations.How might the new inflation calculation method affect Millais’ economic policy?
Modern inflation measures that reflect recent spending patterns may paint Millais’ policies less favorably, even if they indicate only a small increase in inflation.What immediate impact did Lavanya’s resignation have on the market?
Argentina’s stocks fell 8% after Lavaña’s departure, showing investors’ concerns about the stability of the economy.How is inflation currently affecting prices in Argentina?
Food and drink prices rose significantly, rising 2.5% in early February, the largest weekly increase since March 2024, the report said.
