IMF censures Argentina; ‘remedial measures’ expected by September
Argentina became the first country censured by the International Monetary Fund for not sharing accurate data on inflation and economic growth under a procedure that can end in expulsion. The declaration of censure was adopted Friday by the IMF 24-member board of directors and even if it doesn’t have immediate effects, the decision takes the country a step closer to sanctions that include barred access to IMF loans.
The IMF executive board found that Argentina’s progress in implementing so-called remedial measures “has not been sufficient,” according to the statement. The board called on Argentina to “address the inaccuracy” of economic data no later than Sept. 29, 2013. Managing Director Christine Lagarde is required to report to the board on Argentina’s progress by November 13.
The censure followed several attempts to obtain from Argentina information deemed good enough by the IMF to perform economic surveillance. President Cristina Fernandez has denied any wrongdoing even as the government’s official figures have been disputed by the IMF, economists and politicians since 2007.
“The IMF Executive Board found that Argentina’s progress in implementing the remedial measures since the September 17, 2012 Board meeting has not been sufficient. As a result, the Fund has issued a declaration of censure against Argentina in connection with its breach of obligation to the Fund under the Articles of Agreement.
“The Board called on Argentina to adopt the remedial measures to address the inaccuracy of CPI-GBA and GDP data without further delay, and in any event, no later than September 29, 2013. The measures applicable to the CPI-GBA and GDP aim at aligning these indicators with the international statistical understandings and guidelines that ensure accurate measurement.
“The Managing Director is required to report to the Executive Board by November 13, 2013 on the status of Argentina’s implementation of the above remedial measures. At that time, the Executive Board will again review this issue and Argentina’s response in line with IMF procedures.
“The Fund stands ready to continue its dialogue with the Argentine authorities to improve the quality of the official CPI-GBA and GDP data, and, more generally, to strengthen the relationship between Argentina and the Fund”, concludes the communiqué released on Friday.
In 2007 then President Nestor Kirchner replaced senior professional staff at Argentina’s stats office, Indec. While private forecasters estimate that inflation accelerated in 2012 to 25.6%, the government’s Indec said consumer prices rose 10.8%. Private forecasters aren’t identified because they risk being fined by the government for releasing calculations that differ from official data.
According to the fund, Czechoslovakia is the only country ever ousted from the IMF for breaching the same rule, while Cuba withdrew in 1964. The procedure that has censure as a prior step didn’t exist then.