Brazil & Southern Cone - January 2011 (ISSN 1741-4431)

Although the official inflation rate for 2010 was 10.9%, private calculations have put it between 22% and 26% every year since the government's takeover of the national statistics institute (Indec) in 2007. In mid January, Luis Barrionuevo, the leader of the opposition trade union Central General del Trabajado (CTG) Azul y Blanca, said he would ask the government for a “salary increase of 35%" in the upcoming talks with the administration of President Cristina Fernández. Hugo Yasky, secretary general of the opposition Central de Trabajadores Argentinos (CTA), called for a similar increase and even the pro-government head of the Central General del Trabajo (CGT), Hugo Moyano, announced he would ask for a wage rise of 25%, over twice the official inflation rate. The government's acquiescence in its wage negotiations with the unions is seen as an implicit admission of the real inflation rate. Inflation is taking its toll on the availability of currency, which the central bank (BCRA) cannot issue fast enough. In December, the Argentine administration had to “import" 100 peso bills printed by its Brazilian counterpart and in January, it increased its order of Brazilian-printed pesos by 60% to AR$16bn (US$4.01bn), up from AR$10bn (US$2.51bn) originally.

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