{"id":285712,"date":"2026-02-11T12:24:12","date_gmt":"2026-02-11T12:24:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/285712\/"},"modified":"2026-02-11T12:24:12","modified_gmt":"2026-02-11T12:24:12","slug":"argentinas-monthly-inflation-ticks-up-as-milei-faces-backlash-over-an-outdated-index","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/285712\/","title":{"rendered":"Argentina’s monthly inflation ticks up as Milei faces backlash over an outdated index"},"content":{"rendered":"\n

BUENOS AIRES, Argentina (AP) \u2014 Inflation in crisis-prone Argentina accelerated more than expected and for a fifth straight month in January, the country\u2019s statistics agency said Tuesday, a closely watched report whose outdated methodology in recent days stoked political turmoil and created a headache for libertarian President Javier Milei<\/a>.<\/p>\n

Consumer prices rose 2.9% last month compared with December, said the statistics agency known by its Spanish acronym INDEC, largely owing to increases in the prices of food, restaurants, hotels and utility bills.<\/p>\n

Economists say that the formula that INDEC used to calculate the inflation rate still underestimates real price rises in a country reeling from Milei’s harsh austerity program<\/a> that his close ideological ally<\/a>, U.S. President Donald Trump<\/a>, has backed with $20 billion<\/a> and championed<\/a> as a model for downsizing federal bureaucracy.<\/p>\n

After months of mounting pressure, Milei’s government said it would redo the index used in the official inflation reports, which is currently based on consumption habits from 2004 and reads like a time capsule: Cigarettes, newspapers, DVDs and landline phones are considered key to the \u201cbasket\u201d of goods and services consumed by the population.<\/p>\n

The old formula not only fails to reflect how much Argentine households spend on present-day staples like Netflix<\/a> subscriptions and iPhones, experts say, but also underrepresents the costs of public services like health care and electricity that have skyrocketed as Milei slashes subsidies. Rent has also shot up as Milei unwinds price controls.<\/p>\n

\u201cIt is very likely that the regulated public service prices in Argentina will see a strong increase this year, and the new methodology for measuring inflation will give those increases a lot more weight,” said Camilo Tiscornia, director of Buenos Aires consultancy C&T Asesores Economicos and a former central bank official. \u201cThe government is engaged in a fight against inflation, so this index doesn’t help.\u201d<\/p>\n

Milei’s economic team was expected to apply the new index for the first time in Tuesday’s report.<\/p>\n

But last week, officials backtracked and announced that INDEC would carry on using the obsolete formula.<\/p>\n

The move revived memories of blatant tampering with inflation statistics by past populist governments<\/a>, rattling investor confidence and public trust. The country\u2019s widely respected national statistics chief resigned and Argentina\u2019s benchmark S&P Merval stock index tumbled several percentage points last week.<\/p>\n

\u201cWith this decision, a Pandora\u2019s box was reopened,\u201d said Sergio Berensztein, who runs a political consultancy in Buenos Aires. \u201cI know the officials of the economic team, they are in no way going to repeat the mistakes of the past. But the public, the market, investors, society, have every right not to trust.\u201d<\/p>\n

Elsewhere in the world, perhaps such a technical-sounding government decision would fall to the domain of data wonks and financial consultants. But it was the talk of the town in Argentina, a nation of amateur economists weaned on years of uncontrolled inflation<\/a> and violent exchange rate volatility<\/a>.<\/p>\n

\u201cIt generated a lot of questions. These controversies are never good for public opinion,” said Ana Stupi, a 58-year-old lawyer heading home from work in Buenos Aires on Tuesday. \u201cI hope that everything can be transparent so that this economic stabilization continues.\u201d<\/p>\n

Under former President Cristina Fern\u00e1ndez de Kirchner<\/a>, who succeeded her husband N\u00e9stor Kirchner in November 2007, Argentina was accused of doctoring data to make inflation seem only a fraction as high as it really was.<\/p>\n

Between 2007 and 2013, the government fired technical staff at INDEC and packed the agency with political allies to conceal a mounting crisis. Fern\u00e1ndez’s government even deployed fines and threats of prosecution<\/a> to muzzle independent inflation forecasts.<\/p>\n

\u201cINDEC was heavily manipulated for many years … I never trusted any of the data,” said 65-year-old pensioner Liliana Pastor. \u201cWe know that everything like that gets adjusted according to political needs.\u201d<\/p>\n

Experts say the government decision did far more damage than the release of a higher inflation rate would have.<\/p>\n

\u201cIt puts a short-term goal ahead of a long-term strategy,\u201d said Marcelo J. Garc\u00eda, Americas director at geopolitical risk firm Horizon Engage. “It gives the opposition an opening to criticize more substantially the credibility of the numbers that INDEC is producing and therefore question the credibility of the government.\u201d<\/p>\n

The controversy further soured the national mood as Argentines increasingly lament that they\u2019re absorbing all of the pain of Milei\u2019s<\/a> program and few of its benefits<\/a>.<\/p>\n

The main benefit so far<\/a> \u2014 and the main cause of Milei\u2019s glow of public approval<\/a> \u2014 has been the government\u2019s rapid reduction of Argentina\u2019s notoriously high inflation, from over 211% annually in late 2023, when the radical libertarian leader took office, to 31% last year, according to INDEC.<\/p>\n

Few dispute the importance of his victory<\/a>. But many question its sustainability.<\/p>\n

To bring down inflation, Milei has relied on deep spending cuts, an influx of cheap Chinese imports<\/a> and a controversial exchange rate scheme that kept the Argentine peso stable against the dollar, leading some economists to consider it overvalued and making shopping sprees abroad<\/a> inordinately cheap for well-heeled Argentines.<\/p>\n

But after hitting a low of 1.5% last year, monthly inflation has more recently ticked up, reflecting lingering challenges as Milei struggles to cement his primary political achievement. Concern is also growing over how salaries have lagged behind inflation, shriveling in value and squeezing household budgets.<\/p>\n

\u201cAt the end of the day, prices are about what you can buy with your salary. Here and now, it\u2019s obvious that you can buy less than you did a couple years ago,” said Facundo Diaz, a 33-year-old graphic designer.<\/p>\n

In the coming months, further subsidy cuts risk fueling higher inflation, as does a looser foreign exchange rate policy that allows the peso to move more freely in the currency market.<\/p>\n

\u201cMilei seems sort of puzzled by the fact that his theoretical beliefs led him to expect inflation to go down sharply, but he\u2019s facing a different reality that calls that into question,\u201d said Ignacio Labaqui, a Buenos Aires-based senior analyst at risk consultancy Medley Global Advisors. \u201cMost countries between six to eight years to go from the levels of inflation that Argentina had to a single-digit.\u201d<\/p>\n

Although Tuesday\u2019s higher-than-expected rate of 2.9% deals a blow to Milei\u2019s war against Argentina’s chronic price pressures, some experts expressed relief.<\/p>\n

In outpacing even most private-sector calculations, the INDEC inflation figure published Tuesday dispelled concerns \u2014 at least for now \u2014 that the government was cooking the books in any way comparable to his predecessors.<\/p>\n

\u201cFortunately, January\u2019s inflation was high enough that nobody can really say that the index was manipulated,\u201d Berensztein said. \u201cIf the figure had been 1.2% or 2%, it would not have been credible.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"BUENOS AIRES, Argentina (AP) \u2014 Inflation in crisis-prone Argentina accelerated more than expected and for a fifth straight…\n","protected":false},"author":2,"featured_media":285713,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[9877,19866,114,184,234,85,146235,9570,7550,146236,46,23536,12521,146238,146237],"class_list":{"0":"post-285712","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-argentina","9":"tag-buenos-aires","10":"tag-business","11":"tag-economy","12":"tag-government","13":"tag-il","14":"tag-indec","15":"tag-inflation-rate","16":"tag-inflation-reports","17":"tag-inflation-statistics","18":"tag-israel","19":"tag-javier-milei","20":"tag-president-donald-trump","21":"tag-sergio-berensztein","22":"tag-statistics-agency"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/285712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=285712"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/285712\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/285713"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=285712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=285712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=285712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}