From The Economist's monthly email newsletter on Buenos Aires:
Argentina’s president, Néstor Kirchner, seems to be testing a new way to lower inflation: fiddling with the numbers. In January the government hired a new director for the consumer-prices section of the National Statistics and Census Institute (INDEC). Beatriz Paglieri, a trade specialist, has little experience with statistics, but she is backed by Guillermo Moreno, the secretary of internal trade and the chief negotiator of price-freezing agreements. Five days after Ms Paglieri’s appointment, INDEC announced that inflation in January had been just 1.1%, far below the 1.5-2% estimates of private economists.The biggest problem this country faces is that Kirchner is using so many tricks that can only be used once. These short-term, one-off solutions mean that, increasingly, the country's economy -- like the buses, the sidewalks, and the banking system here -- is held together by string.
The institute arrived at the lower figure by changing its methodology. Ms Paglieri dropped from the index the prepaid annual health-insurance plans, whose average cost increased 22% over the past year. She also changed her sampling of tourist companies, such that holiday costs for January rose by only 3.7%. It remains to be seen whether the move was merely a one-time adjustment. Should the statistical tinkering continue, Mr Kirchner’s reputation (and chances of re-election) might suffer, as might the country’s recovery from the financial collapse of 2001.