MercoPress. South Atlantic News Agency

IMF mission arrives in Buenos Aires first week of December

Nicolas Eyzaguirre, IMF Director of the Western Hemisphere Department

The International Monetary Fund confirmed Argentina’s request for technical assistance on the elaboration of a Consumer Price Index (CPI). In a statement release by Nicolas Eyzaguirre, Director of the Western Hemisphere Department added “we are currently in contact with the authorities on planning the missions”.

The Argentine government earlier said it had asked the IMF to help revamp the country's widely discredited inflation data in a major about-face for the administration of President Cristina Fernandez de Kirchner that has long blamed the IMF for aiding the country's devastating 2001-02 economic crisis.

The return of the IMF occurs when the Argentine government is negotiating with the Paris Club the cancelling o defaulted debt estimated in over 6.7 billion US dollars. A week ago President Cristina Fernandez announced as a victory the fact that an agreement with the Paris Club would be achieved without the participation of IMF auditing.

The decision to request technical assistance from the IMF was announced this week by the Minister of Economy Amado Boudou during a press conference sitting next to Ana Maria Edwin and Norberto Itzcovich, heads of the much questioned Argentine Statistics Institute, Indec.

“In the first fortnight of December the IMF experts will be coming for a first meeting in Buenos Aires”, confirmed Itzcovich.

Although it does not imply abiding by Article IV which means the opening of all government accounts to IMF auditing, which has not been taking place since 2006, Argentina will have to offer the IMF experts data on some of the most questioned statistics by foreign and domestic investors, specifically the inflation index.

Pending debt with the Paris Club and lack of credibility of official statistics are currently the main obstacles for Argentina to return to the voluntary money markets and having access to rates similar to those of its regional partners.

Indec is the main reason why the Argentine government refuses to comply with Article IV which demands the opening of all the country’s accounts and numbers. Lower inflation rates means paying less to indexed sovereign bonds holders.

Boudou emphasized that “this request has nothing to do with the Argentine government’s policy of lowering its overall debt burden, implemented since the 2001 default”.

Nevertheless this did not impede Boudou and Foreign Affairs minister Hector Timerman from meeting last week with IMF officials in Washington as revealed by the Buenos Aires press. Apparently the IMF was preparing to make public a very critical report on Indec.

Boudou underlined that the coming of the IMF “will mean a quality leap for domestic statistics level”. However he forgot to mention a report on Indec previously requested from five Argentine universities, which is extremely critical.

Relations between the Argentine government under the Kirchners and the IMF have always been tense. The first landmark was at the end of 2005 when former president Nestor Kirchner announced the decision to pay back all loans to the IMF, totalling 9.8 billion US dollars.