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IMF warn Argentina on ‘lack of progress’ in addressing inflation data

Thursday, February 2nd 2012 - 05:15 UTC
Full article 33 comments
Argentina’ stats’ office Indec at the heart of the controversy Argentina’ stats’ office Indec at the heart of the controversy

The International Monetary Fund (IMF) warned Argentina about its “lack of progress” in addressing inflation data and called on the country to implement “specific measures” within the next six months to improve it.

“The Executive Board regrets the absence of progress in the adaptation to international statistics standards and took note of the intention of the Argentine authorities to adopt measures to face the quality of the data presented,” the Fund stated in a press release on Wednesday.

However, it does not mention any specific sanctions against Argentina.

The organization insisted on “the obligations of all member countries to provide accurate data to the International Monetary Fund,” which range from inflation to Gross Domestic Product (GDP) levels.

The press release “calls on Argentina to implement specific measures, within a period of 180 days, to address the quality” of its inflation data.

Argentine consumer prices rose 23% last year, the most among the Group of 20 nations, according to opposition lawmakers who base their estimates on reports by economists facing fines of 500,000 Pesos (115.000 US dollars) for questioning the government’s data. The national statistics agency said prices climbed 9.5% in December from a year earlier.

Argentine bonds linked to the official inflation index fell 25% last year as the government fined researchers and failed to implement the recommendations of an IMF report requested by President Cristina Fernandez and submitted in April. Latin American inflation-linked debt fell 0.7% over the same period, according to Barclays Capital.

Norberto Itzcovich, Indec’s technical director, said last September that the methodology used by independent researchers wasn’t of the quality required to accurately measure inflation.

Argentine economists began releasing their own inflation reports in 2007, after then-President Nestor Kirchner changed personnel at the national statistics institute in what he said was a bid to “improve operations.”

In 2010, Cristina Fernandez asked the IMF to help create an index that would reflect current nationwide consumption habits. The government has refused to let the IMF review its finances since 2006, when it paid off its 9.8 billion dollars debt to the lender. The Kirchner ruling couple blamed the IMF for pushing the country into a financial crisis that led to a 2001 default on 95 billion of bonds.

Last month, Gerry Rice, director of the IMF external relations department, said the board wouldn’t apply sanctions against the country for not complying with its recommendations. The IMF board will next meet Sept. 6 to review any changes made by Argentina.

Top Comments

Disclaimer & comment rules
  • tobias

    It would be the height of arrogance to impose “sanctions”. The IMF has no sovereignty over Argentina (even if they concerns are well founded regarding inflation figures).

    Feb 02nd, 2012 - 05:27 am 0
  • Helber Galarga

    Given their past track record, anything and everything the IMF says should be ignored. Given that past track record, they have no authority to give any advice. If they were just the smallest bit sensible, they would acknowledge that, and have someone else give the advice they want to give out themselves.

    Feb 02nd, 2012 - 07:03 am 0
  • ElaineB

    I can see that the CFKC supporters follow her line that the IMF were solely to blame for the collapse of the Argentine economy 10 years ago. This is not true. Argentina borrowed more and more money but refused to comply with the terms of the loan and eventually the IMF refused any more money. Was it the right thing to do? I don't think so. Was there blame on both sides? Yes. But who is most to blame? The over-indulgent IMF who were not tough enough on the reckless over-spending Argentina and allowed the crisis to escalate? Or the feckless Argentine government that believed it could walk on water and the IMF would never refuse its requests for more, more, more. I say it was about 50/50.
    Argentina does not need to listen to the IMF if it wants to remain a financial pariah. However, your government does want to be part of the financial community again and it has to play by the rules to do so. They know that.

    Feb 02nd, 2012 - 10:38 am 0
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