IMF Managing Director Christine Lagarde warned Argentina on Monday that the multilateral lender is willing to show it a red card if by December the government of Cristina Fernández does not meet its promises of providing reliable inflation and GDP statistics, during a conference at the Peterson Institute in Washington DC.
A week after the IMF gave Argentina a last dead line (December 17) to change the way inflation rate and GDP is calculated and adapt it to international standards, Lagarde came on stage to say This is the last yellow card we show them, next time we'll get them a serious sanction.
Argentina has three months to show some improvements and avoid the red card.
Last September 17 the IMF Executive Board met to consider Ms Lagarde’s report on Argentina’s progress in implementing the remedial measures to address the quality of the official data reported to the Fund for the Consumer Price Index for Greater Buenos Aires (CPI-GBA) and Gross Domestic Product (GDP).
At the time the Executive Board said “it regretted the lack of sufficient progress in implementing the remedial measures since its February first, 2012 meeting and expressed to the authorities its concern that Argentina has not brought itself into compliance with its obligations under the IMF Articles of Agreement by implementing the said measures”, and called on Argentina to implement the measures without delay.
On Sunday Economy minister Hernan Lorenzino said that Argentina would continue working with IMF technical staff to perfect the country’s stats, “in the framework of a project we have in process”.
In an interview with the government oriented newspaper Pagina 12, Lorenzino said that the idea is to migrate from the consumer prices index measured in Buenos Aires and outskirts to make it national which would “give a more representative measurement of the differences in a territory so large as Argentina”-
However Lorenzino pointed out that the relation with the IMF has been and will continue to be of technical assistance. “There was a technical link with the mission that arrived to Argentina and helped with this process, but I repeat it is on a technical basis”, which was interpreted as the first official reply to the IMF last week’s communiqué.
According to the official Argentine government Indec stats office, consumer prices in Argentina during August climbed 0.9% over July and 10% in the last twelve months. However the so called Congressional index, an average from private economic consultants that are banned from releasing their findings, shows that inflation last August was 1.91% and 24.23% in the last twelve months.