Letter to the Editor: Argentina Seriously Understates Inflation

Dear Sir:

Count me among the skeptics mentioned by Mary Anastasia O’Grady in her Americas column “Argentina’s Crumbling Economy” (Jan. 13). Ms. O’Grady cites the government’s official annual inflation rate: 10.5%. She then reports an annual inflation figure of 26.4% courtesy of a Buenos Aires-based think tank (FIEL).

The Johns Hopkins/Cato Institute Troubled Currencies Project, which I direct, has been making reliable estimates for Argentina’s implied annual inflation rate since 2012. Our current estimate stands at 63%—more than double the highest rate reported by Ms. O’Grady.

Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore and a Senior Fellow at the Cato Institute in Washington, D.C.