Redrado fights Argentina’s corner
Martín Redrado, president of the Central Bank of Argentina, tells Sudip Roy why the banker should get through the global crisis intact.
MORE THAN ALMOST any other nation, Argentina understands what it is like to undergo a financial and economic crisis. The country has experienced several over the past 30 years, culminating in its ruinous debt default in 2001-02.
In the six years since, Argentina has bounced back, with its economy growing at an impressive 9% a year between 2003 and 2007. That growth was initially spurred by a surge in trade surpluses and then sustained by big investment in both the public and private sectors.
Over the past year, however, concerns have again risen about the strength and direction of the economy. Several issues have come to the fore. The most worrying is inflation. Although the official statistical agency, Indec, says that the country’s annual inflation rate is 9%, most observers believe it to be about three times that level.
The discrepancy between the official rate and what most people believe to be the true one has severely dented the government’s credibility. The administration of president Cristina Fernández de Kirchner has come under attack from several critics, who say that reporting an artificially low inflation rate helps the government to overstate real GDP.