The Inflation is in the Pork Meat

The butcher “The Golden Pig” in Havana. (14ymedio)
The butcher “The Golden Pig” in Havana. (14ymedio)

In evaluating the fulfillment of the economic plan for the first half of 2015, the Council of Ministers asserts that inflation is between 3% and 5%. Why such imprecision?

The technicians justify this vagueness by the dual currency, which blocks precision. However, a government that has a monopoly on foreign trade and the wholesale market, as well as control of small business, shouldn’t have this problem.

On the other hand, the professionals who work in the statistical institutions of the country are highly qualified and have international advice to overcome the obstacles that derive from the circulation in the country of both the convertible peso and the Cuban peso.

There are two ways of looking at the figure published by the Government: from the perspective of the economist and politician, or from the reality experienced by the people.

They know, for example, that any analysis of inflation taking as a base of calculation a year after the implementation of the dual currency will have greater complexity. However, if they choose a time previous to the implementation of the dual currency, then the inflation would be very high.

It is not wrong for the government to analyze the inflation of the last five years, because in that way in can see if it has controlled the price increases since 1959. Perhaps the 3% or the 5% that was recently announced refers to the last three- or five-year period. The choice of the base year could make the inflation higher or lower, so the analysts can manipulate this information for political or technical reasons.

There are two ways of looking at the figure published by the Government: from the perspective of the economist and politician, or from the reality experienced by the people.

The statistical logic of the technicians and the optimistic advice of the politicians see a positive sign in the low rate of inflation And it would be, if the data were true. But the people don’t apply abstract thinking in their analysis of inflation. They don’t even fully understand the concept. Living with the distress for dozens of years.

How could Cubans understand that inflation is low when a pound of pork that three decades ago sold for three Cuban pesos, is now worth more than 40 pesos? They would only understand if their salaries or their incomes, like the price of meat, had increased by the same 13 times.

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