MercoPress. South Atlantic News Agency

Argentina files criminal charges against consulting firm for publishing inflation data

Inflation in Argentina together with Venezuela’s is the highest of South America

Argentina's government has filed criminal charges against the managers of an economic consulting firm, escalating its persecution of independent economists. A federal court official said Friday that a judge is evaluating the charges but has yet to decide if it is appropriate to begin investigating them.

The government is charging MyS Consultores with “publishing false information about inflation data” to benefit themselves and their clients. The criminal complaint alleges that MyS's data also lead to speculative behavior in Argentina's bond market.

MyS Managing Partner Rodolfo Santangelo described the charges as “ridiculous” and said the firm's inflation data do not affect financial markets.

Consumer prices rose 9.7% in May from a year ago, according to the national statistics agency, Indec. But virtually all economists say annual inflation surpasses 20%—one of the world's highest rates—angering government officials who dismiss inflation as a problem.

The criminal complaint, initiated by the Commerce Secretariat, is the harshest in a series of legal measures against economists. The credibility of Indec's data has been questioned ever since former President Nestor Kirchner replaced longtime civil servants with political appointees in early 2007.

So far this year, the Secretariat has fined at least nine economic research firms 500,000 pesos ($122,000) each. This week, the Secretariat also slapped a second fine on Orlando J Ferreres & Asociados.

“They fine us for saying how much prices have risen,” Mr. Ferreres, director of his eponymous firm, said. “They could seek criminal charges against all of us. We don't know how far they're willing to go.”

Mr. Ferreres said the legal actions are part of a strategy to prevent independent economists from publishing potentially negative information during an election year.

A congressional freedom-of-speech committee recently started publishing a compilation of anonymous private-sector inflation estimates in a bid to protect the economists from persecution.

Economists point to unrestrained fiscal spending, a booming economy and an expanding money supply as the main drivers of inflation that is at least double that reported by Indec.

They also say the government tacitly admits to high inflation every time it backs collective-bargaining agreements that include annual wage increases of 20% to 30%.