(AP) Six pesos a day. That's all it takes to eat in Argentina, at least according to the government.
But on the streets of the capital, 6 pesos doesn't stretch beyond a pack of chewing gum, or a cup of yoghurt, or a single alfajor the country's traditional caramel-and-chocolate cookies. They're tasty, but hardly provide what the government calls the minimum calories and proteins needed to sustain a moderately active adult.
As the International Monetary Fund moved closer Thursday to sanctioning Argentina for inaccurate inflation data, The Associated Press checked prices in Buenos Aires, and couldn't find a can of soda for less than 8 pesos. Even a ham and cheese sandwich cost 13 pesos at a downtown kiosk. That's without lettuce or tomato. Food purchased at supermarkets is more economical of course, but even there, 6 pesos bought just one can of green peas, or a pound of raw rice hardly enough for a complete and healthy diet.
The official inflation rate is based in large part on what the national statistics service says is the total cost of 27 items the basic food basket a measure of the bare minimum that an extremely poor person needs to consume. Monday's update said that monthly basket for a family of four cost 719 pesos in December. That works out to 5.99 pesos per day, per person.
The IMF has lost patience with these numbers after urging Argentina for years to improve this consumer price index, which lost credibility in 2007 after political appointees replaced career statisticians. The new methodology, which has kept official yearly inflation in the range of 10 percent le digits ever since, has not been fully explained, even as consumers complain about soaring costs of beef and other staples. IMF experts and Argentine economists have spent months working privately with government officials to recommend very detailed ways to get accurate numbers again, but the government has yet to adopt them.
The IMF is now on the 12th step of a 15-point process for flagging Argentina with what IMF Director Christine Lagarde called the red card for countries that don't follow the rules. On Thursday, she announced that a board meeting will be held Feb. 1 to consider whether to censure Argentina and eventually suspend its voting rights and membership in the world body.
Even close government allies have given up defending the official statistics service, known as INDEC, which announced Monday that Argentina's annual inflation was just 10.8 percent in 2012. Private economists have estimated that Argentina's inflation was actually 26 percent or more, making it the worst in all of Latin America. A key indicator: Unions that have been key to President Cristina Fernandez's hold on power are pushing for pay raises of 25 percent or more this year, despite a government-announced ceiling of 20 percent.
The low official inflation numbers have historically enabled the government to keep pay raises and consumer prices from going even higher. And by masking what economists say is the true size of economic growth, the government also has shaved billions from the payments it makes on GDP-linked bonds.
The official data reflects a wider effort by the government to control many aspects of the Argentine economy, subsidizing major industries, fixing prices and controlling currency exchanges to the point that it's almost impossible now to legally trade pesos for dollars.
Officially, the U.S. dollar that generations of Argentines have sought as a refuge from their roller-coaster economy can now be bought for 4.96 pesos, but only with prior approval from the tax agency and the central bank.
In practice, the ever-changing requirements for these approvals have made legal dollar purchases all but impossible and have fostered an illegal black market for what Argentines call the blue dollar. While relatively small, that rate is having an increasingly outsized influence on the overall economy.
The blue dollar is reflecting the inflation that people feel in their pockets, said Argentine economist Enrique Dentice at the Universidad de San Martin. It's what people expect to be the rate of devaluation.
Argentina's leading media companies and web sites track the illegal trading of this blue dollar by the minute as one of the nation's most closely watched indicators of consumer confidence, and as with the INDEC, their methodologies are not transparent. But since the market is independent, it provides some insight into how Argentines see their economy. And this week, the gap between official and illegal rates broke wide open, with the blue rate falling to an unprecedented 7.54 to the dollar.
Dentice says the fall is unjustified, caused by factors that have little to do with the inherent strength of an economy that would do better if allowed to operate more freely.
It's psychological, he said, citing the many crashes that have fundamentally shaken the faith Argentines have in their economic progress.
When you have the memory we have, of generations that always end up doing badly, it's difficult to escape from it, he said. We have this ancestral memory. We expect to be saved by the dollar.