Argentina’s prices could cost an election

How much are prices going up here?

That is the question of the day, with many residents saying costs are rising rapidly even as the Argentine government reports moderate increases.

The discrepancy is no small issue during an election year in a country where the hyper-inflation of the past is easily recalled.

In newspaper columns, on radio talk shows and in grocery aisles, consumers talk about the soaring prices of food, from lettuce to fruit to meat, the national staple.

“It’s not just that prices rise from one week to the next, but we see prices shoot up from day to day -- or the same day,” said Mariela Martinez, 60, who was shopping Wednesday at a popular supermarket.

“In my house, it’s been a long time since we ate an expensive cut of meat,” Martinez said.

But the chorus of complaints is not reflected in the official consumer price index.

The most recent statistics show the cost of food staples declining in March, a finding widely ridiculed here.

Skeptics noted that a preliminary tally leaked to the media showed the monthly index rising 3.6%, whereas the official figures released later reported a 0.2% drop.

A government that has aggressively fought inflation is now being accused of cooking the numbers. As further evidence, critics point to the January sacking of the head of the bureau that produces the price statistics, which had remained independent for decades, even during the dark days of military dictatorship.

Argentine officials deny wrongdoing.

“I don’t believe, like many allege, that the government releases figures that aren’t true,” said Alberto Fernandez, President Nestor Kirchner’s Cabinet chief.

But the allegation has become a major component of the country’s political debate. Inflation rates are important not only to consumers, but also to foreign investors.

Roberto Lavagna, a former finance minister who is running for president, claims inflation last year was about 50% higher than the government acknowledges.

The economy is going askew, says Lavagna, who has publicly charged “heavy-handed manipulation” of the data.

This week, workers at the national statistics bureau staged a 24-hour strike to denounce what they characterized as official legerdemain with inflation data. The bureau has lost credibility because of government interference, said Daniel Fazio, union chief at the agency.

He called on the government to “repair the damage done to the bureau.” Employees had previously complained of an “institutional coup.”

The complaints have disturbed Kirchner, whose political team is mulling whether he or his wife, Sen. Cristina Fernandez de Kirchner, will run for president in October.

Kirchner was elected in 2003 after an economic meltdown that saw five presidents come and go within a month.

The economy has rebounded briskly under Kirchner’s stewardship.

The president, a left-leaning populist who likes to rub shoulders with Venezuela’s Hugo Chavez, has benefited politically from the comeback, emerging as a heavy favorite for reelection if he decides to run again.

This month, the government said its cash reserves had risen to more than $37 billion, a record.

Argentina’s resurgence from its 2001-02 collapse will be a major selling point for either of the Kirchners in the coming contest. But those in politics here recognize a fundamental truth: Rising prices can bring down a government. The days of runaway inflation in the late 1980s remain a bitter memory for many Argentines.

For that reason, the government is determined to keep inflation at about 10% or less. Last year’s official rate was about 10%, after a 12% rise in 2005.

Kirchner’s administration has pressured producers to keep prices down, capped salary increases, held the line on electricity and other costs and even halted beef exports for six months last year to bolster domestic supplies.

The president later relaxed the export ban, but subsequently increased export taxes on soybeans in another bid to bring down prices.

The government’s chief inflation fighter, Interior Commerce Secretary Guillermo Moreno, has earned the nickname “Black Monk” for his aggressive behind-the-scenes negotiations with producers, wholesalers and others.

But that doesn’t seem to have made much difference at the supermarkets and shops where talk of rapidly rising prices and shortages of meat and other staples appears to dominate the conversations.

“The sensation I have is that every time I go to buy something, the prices are more expensive,” said Lourdes Prado, 26, a mother of two.

“The meat is prohibitively high and the fish impossible!” Prado said. “Sometimes the chicken is a better bargain, but not everywhere.”

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patrick.mcdonnell@latimes.com

Andres D’Alessandro of The Times’ Buenos Aires Bureau contributed to this report.