Ely's Guide to Inflation

Receipt from Freddo. Note the price. The stamp means that they've given me my ice cream and I can't go back for seconds on the same receipt.

A quarter kilo of ice cream at Freddo, a major chain of premium "export-quality" ice cream now costs 12 pesos. When we first arrived here a year and a half ago, a quarter kilo was -- if I remember correctly -- 8 pesos. Therefore, 50% inflation in 18 months. Given that our salaries haven't increased with inflation, this represents a considerable reduction in my ice cream purchasing power.

According to INDEC, the national statistics agency that has been discredited in recent months due to allegations of political meddling, the official inflation is at 8.5% since December 2006. (However, when the cost of a good or service increases, INDEC tends to remove it from the basket of goods that it uses to calculate the official inflation rate. That explains why, according to Argentina, the 35% increase in our health insurance doesn't really count as inflation.) Unofficially, the inflation rate is probably closer to 15% a year.

I've been keeping an eye on the price of ice cream because I find it a pretty reliable way to calculate inflation on consumer goods. Of course, ice cream isn't the only item to increase in price over the last few months. Just about every item in the grocery store costs more now than it did when we arrived. Like I said, the only thing that hasn't increased is our salaries. Or tomatoes, due to the "spontaneous" tomato boycott carried out the week before the heated national elections that brought prices down from a ridiculous high of 18 pesos a kilo to about 3 pesos a kilo.

Cultural notes:

Calidad de exportación: when Argentines (specifically Argentine businesses) want to advertise a product as high quality, they say that it's "export quality." The best of the country's bounty -- principally beef, wine, leather + other grain products -- is slated for export to the United States, Brazil, Europe and the Far East. The second-rate products are sold at home. Argentina also has the highest number of psychologists per capita. You can draw your own conclusions about the national inferiority complex.

***UPDATE***
In today's La Nación: According to a report published today by former INDEC employees (fired last spring for political reasons), the real inflation rate for 2007 is 26%. Compare this to the "official" inflation rate of 8.5%. I'm the one who does the monthly accounting here, and 26% inflation feels about right.
Link: http://www.lanacion.com.ar/economia/nota.asp?nota_id=982841