BUENOS AIRES (Dow Jones)–Argentina’s tax collection soared again in August as the economy continued to expand quickly and consumers spent more on goods like cars, home appliances and services.
The government collected ARS35.4 billion ($8.4 billion) in taxes last month, an increase of 46.7% from the same month a year earlier, Argentine President Cristina Kirchner said in a speech late Thursday.
According to the government, gross domestic product expanded by about 9% in 2010, and economists expect the economy to continue growing at a fast pace this year, although at a slower rate than last year’s, perhaps in the neighborhood of around 5%. Most economists say rampant inflation is a key reason why tax collection continues to rise so quickly. Economists estimate that prices are rising at an annual rate of more than 20%.
Meanwhile, consumers are using purchases as a hedge against inflation, buying while they can to avoid paying even higher prices later.
Source: online.wsj.com