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IMF asks Argentina about inflation data reliability

Thursday, February 7th 2008 - 20:00 UTC
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The International Monetary Fund has asked Argentina's statistics office INDEC to clarify some methodology changes it introduced last year, echoing concerns among economists, statisticians --and public opinion-- over the reliability of the country's inflation data, reported the Buenos Aires press

An INDEC spokesman confirmed Wednesday that the agency had received an e-mail from the IMF and that the questions laid out in it "are being reviewed". According to a copy of a January 15 document disclosed by Buenos Aires financial press, Argentina's economic data may be excluded from the IMF annual World Economic Outlook if the statistics don't meet standards established by the United Nations. IMF asked specifically if INDEC had changed its method for calculating prices in sectors such as tourism, health, private schools and foods. An IMF spokesperson said the organization does not comment on communications with countries. However, the essence of the communication appears consistent with comments new IMF Managing Director Dominique Strauss-Kahn made during a visit to Buenos Aires for the inauguration of President Cristina Fernandez last December 10. "It is clear that one of the improvements we need, not only in the economic policies of Argentina but in the data, is to have a better appraisal of what inflation really is," said Strauss-Kahn at that time in response to a reporter's question about widespread allegations of data manipulation at INDEC. "Obviously, for reasons everyone knows, the official INDEC index does not reflect the way it goes." Ever since the Argentine government's reshuffle of INDEC management in January last year, numerous INDEC workers have charged that data have been systematically manipulated and that the agency's benchmark consumer price index grossly understates real inflation. Their allegations were supported last year in two prosecutors' investigations that are still awaiting judicial review. According to INDEC's official data the Greater Buenos Aires consumer price index, the country's main inflation benchmark, rose by 8.5% last year. In contrast, estimates produced by protesting INDEC staff put the CPI increase in a range of 22.3% to 26.2%. The government has repeatedly denied data manipulation. An official close to Commerce Secretary Guillermo Moreno, who is named by the prosecutors as the architect of the alleged data manipulation said he denies INDEC staff's description of his actions as "intervention". IMF also asked the agency if it was true that it had revealed to government officials the identity of the retailers it surveys to measure CPI, enabling Moreno to reach price-control agreements with them. The prosecutors' reports charge that this was a breach of a confidentiality law protecting the identity of INDEC sources. Furthermore, the IMF asked about the reported demotion and layoffs of INDEC employees who resisted the alleged data manipulation. In this case, the IMF noted, there would be a breach of international standards set by the United Nations. INDEC union claims some 14 employees were removed from the agency and reemployed at the Economy Ministry after they testified against government intervention. Additionally an unspecified number of statisticians and administrative employees have been demoted and replaced with employees willing to collaborate with the authorities and "improve operations".

Categories: Economy, Argentina.

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