Even according to questionable official reports by the Argentine government, the economy has shrunk %0.8 from the first quarter of the year.
Roughly 100 years ago, Argentina thrived under a relatively free market, and was one of the wealthiest nations in the world. Investments flew into the country, and growth surged. Today, the opposite is true, as President Cristina Fernandez de Kirchner increases restrictions, control, and effectively destroyed private property rights by nationalizing the largest oil producer in the country. During her first term, she had also nationalized Aerolineas Argentinas at an undisclosed price, and had expropriated at least $24 billion worth of private pension savings.
Argentina’s Fernandez has recently tightened trade restrictions recalling the protectionist policies of Juan Peron, and has also restricted the ability to purchase dollars. Due to the inflation caused by her policies, many have been seeking a safe haven in US dollars as a way to cut losses from up to %27 in inflation on the Argentine Peso.
In 2007, her late husband, Néstor Kirchner, replaced directors at the state national statistics agency, and began fining researchers at the agency for reporting inflation rates which were contradictory to the official inflation line.
The official rate sits around %10, while most independent estimates place it above %20, and some close to %30, although state repression of data makes it hard to compile accurate information.
The disparity between government reports, and independent estimates of Argentina’s inflation rate has become so blatant and disconcerting, that the International Monetary Fund (IMF) has threatened sanctions if the situation is not addressed.