Source used: http://www.economist.com/node/21548242
Although Argentina suffers from mounting inflation and has for years, few know the exact inflation rate. Since 2007, the Argentinian government has released false inflation rates of around 5% to 11%. Independent estimates for the actual inflation rate vary between 25% to 35%. At the same time the government denies inflation as a problem, they increase the money supply, why only exacerbates inflation by weakening buying-power. In an attempt to strengthen the economy, Argentina's deception only perpetuates economic strife. Not only do they further weaken their currency by printing more money, but the government's lies anger constituents and slows growth by making investors wary to invest in the Argentinian economy.
Argentina sounds like its facing a major problem when it comes to inflation. Unfortunatly, the policies used to bring down inflation often slow economic growth. It sounds like Argentina has got a serious decision to make.
ReplyDeleteI find it very interesting that Argentina frabricates their inflation. As we have learned from breifly glancing at history, simply printing more currency does not equate to economic growth. I agree with Brock, and I think that Argentina will have to make a major shift in monetary policy.
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