This month, the government’s claims of Argentina’s economic recovery face a moment of truth.
Throughout September, key statistical indicators which had been previously forged or discontinued during the Fernández de Kirchner administration but that are now back and working will offer some of the first reliable signs on the evolution of unemployment, poverty and production during President Mauricio Macri’s term.
The INDEC statistic bureau came (rightly) under fire for cooking up an increasing amount of reports during most of the Kirchnerite decade, beginning with the consumer price index in 2007, when the government tried to airbrush its inflation figures.
That rot ultimately reached almost all of the traditionally key economic measurements, which lost credibility and were ultimately suspended, only to start slowly coming back online last year following a change of administration. But with all the data lost in between, comparisons to see if social indicators were improving or getting worse proved speculative at best.
Starting next week, the jobs and poverty reports will see the first year-on-year comparisons be published, while other key quarterly reports such as gross domestic product (GDP) will also come out during September.
PROBLEMS BEYOND INFLATION
While fudged inflation data became the icon of INDEC manipulation during the Kirchners’ presidencies — perhaps due to how simple it was for anyone to notice that prices (as well as most salaries) had gone up across any given year more than the 10 percent that the government was willing to admit, or maybe because it was the first case of data cooking — the consumer price index was far from the only problem at the institute.
GDP stats between 2007 and 2015 also suffered, because the real purchasing power of national production needs to be adjusted according to the inflation data that was being altered in the first place, leading to an overestimation of the country’s economic output.
The same was true of poverty and destitution data, where the basic basket of goods that an individual needs to be able to afford with their income to be considered above the poverty line also has to be adjusted monthly to account for the effect of inflation.
In the end, as the economy began to struggle more during the third Kirchnerite presidency (2011 to 2015), other INDEC figures unrelated to inflation also raised the eyebrows of a wide range of experts, who suspected further manipulation was taking place in order to hide poor results, from foreign trade reports to unemployment data.
In the latter case, the suspicion was that many of the unemployed were being deceitfully counted as “inactive”: not struggling to find a job, but simply not looking for one, which puts people in a different category. Sudden, unexplained spikes of inactive people in INDEC’s reports seemed to confirm that manipulation hypothesis. Multiple (mostly non-Kirchnerite) experts agreed.
THE END OF THE TRANSITION
Following 2015’s presidential transition, Macri chose Jorge Todesca, an economist linked to Peronism who had fought attempts from Kirchnerite officials to censor alternative economic measurements made by his consulting agency, to overhaul the INDEC and recover the credibility it had lost.
The first reports from the revamped institute came out by mid-2016, but they still had a problem: many of them couldn’t be compared against any other recent data to see if the trends were overall improving or getting worse. This was due to the lack of publications during the months in which Todesca led the restructuring of the institute, combined with the aforementioned lack of reliable data from the late Kirchnerite years.
So when the first unemployment figures came out in August 2016, saying that 9.3 percent of economically active Argentines were struggling to find a job, a clash over what to make of them began.
The number was certainly high, but was it rising or going down? We couldn’t know. Could it be compared to the record lows published just before the 2015 election by the Kirchnerite administration? Probably not, experts said, even if it was still probable that it had risen following the Macri’s early economic reforms, which were painful for several job-creating sectors.
Proper comparisons were also difficult during the subsequent quarterly job reports, as the cyclical nature of the country’s economy means that the first three months of, say, 2017, are more comparable to those same first three months the year before than to the last three months of 2016 or to 2017’s second quarter.
On September 14, the first year-on-year comparison for unemployment data will be available since Todesca’s overhaul, as 2017’s second quarter’s jobs data will come online.
Exactly two weeks later, on the 28th, the same will be true of the poverty and destitution figures, as both the jobs and poverty reports come from INDEC’s Permanent Households Survey (EPH), which was completed for the first time roughly a year ago.
According to alternative measurements from the Argentine Catholic University (UCA), poverty in Argentina rose since Macri took office, as the devaluation of the peso was not compensated by similar increases in salaries, pensions or social programs among the lowest earners, but comparisons between UCA and INDEC’s data over longer stretches is harder due to differences in methodology.
Between both of those INDEC reports, on September 21, the second quarter’s official GDP figures will also become available, with economic growth above 2 percent quite likely according to alternative indicators that usually correlate well with INDEC’s GDP figures.
Breakdowns by sector and region, as well as all kinds of economic analyses, political interpretations and even methodological debates will come with them, some more encouraging than others, but at least some good news seem granted: that there will now be some basic data acting as shared ground on which to build those discussions.