Argentina unveiled a new consumer price index on Thursday, hoping to tame criticism the government is under-reporting inflation and seeking to restore investor confidence in official economic data.
According to the revamped index, Argentina's consumer prices rose 3.7 percent in January compared to December, Economy Minister Axel Kicillof announced on Thursday.
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The figure was the first reading published under a new index designed in consultation with the International Monetary Fund. The previous index had been widely discredited and was widely considered to under report the actual number, prompting censure from the IMF.
Alberto Ramos, an economist with Goldman Sachs, said the January figure was "better than expected," and appeared to be a "genuine effort" to narrow the gap between official figures and private inflation estimates.
"The key issue going forward will be whether they are consistent and stay the course because one data point does not make a trend," he said.
Analysts have accused Argentina's government of manipulating inflation figures since early 2007 for political gain as well as to reduce payments on its inflation-indexed debt.
Private economists estimated consumer prices rose 5.6 percent last month, according to the median in a Reuters poll of six analysts. Independent economists say Argentine inflation is running at about 30 percent annually.
Already suffering from one of the world's highest rates of inflation, the figure spiked in January as a sharp devaluation of the peso made imports more expensive.
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Analysts predicted the government would not reveal the true extent of inflation in January for political reasons and as it tries to keep a lid on wage demands. Labor talks due in March are expected to be tough.
The new index is seen as a sign that the country is trying to get its relationship with the IMF back on track. Previous official inflation figures were often less than half private estimates.
The government made changes to the consumer price index methodology in 2008, but they failed to quell criticism.
The highly-anticipated index will now measure prices on goods and services nationwide at more than 12,000 stores. Previous readings were based on prices in Buenos Aires and the city's metropolitan area.
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On Thursday, President Cristina Fernandez lashed out at supermarket chains and other business leaders for a recent spike in prices, which she blamed on "speculation."
With reserves draining away, Argentina is seeking access to international money markets, which it has been shut out of since its massive 2002 debt default.
The country has also recently revived long-stalled talks to resolve some $9.5 billion in debt it owes to the Paris Club, a group of creditor nations.
Argentine officials are seeking a settlement with the Paris Club at a time when its currency reserves have fallen to seven-year lows. Government officials hope any deal could bring new sources of international funding and provide hard currency.