MercoPress. South Atlantic News Agency

IMF estimates Argentina 2012 growth below government target but above private forecasts

Reliable stats and inflation remain irritating issues between the IMF and Cristina Fernandez

Argentina will grow 2.6% in 2012 according to the IMF latest World Economic Outlook, which is below the 3.4% estimated by President Cristina Fernandez administration for this year’s budget.

Last April IMF estimated the Argentine economy would expand 4.2%, but despite the significant reduction to 2.6% it is above private estimates in Argentina which forecast somewhere between 1% and 2%. Nevertheless Argentina’s IMF estimate will be below the average for the region, 2.9% which has Peru leading with 6% and Brazil with 1.5%.

For next year the IMF estimates Argentine GDP growth at 3.1%, which is also below the 4.4% estimated by the Argentine government.

The WEO also refers to inflation and warns about growing concerns in “Venezuela and Argentina” where policies have not been adjusted to the appropriate reality and “inflation continues at high levels”.

Despite the warning the IMF continues to use the official stats estimates which indicate 9.9% this year and 9.7% in 2013. But as in previous outlook editions the IMF points out that the GDP and inflation estimates are based on official data. However the IMF staff is also appealing to alternative measurements of GDP and inflation including data from private analysts which since 2008 have indicated significantly lower growth rates for the GDP, and provincial and private data on inflation which have sustainedly shown higher rates that those supplied by official data, particularly since 2007.

President Cristina Fernandez and IMF managing director Christine Lagarde have clashed over the country’s stats and reliability, and the IMF on two occasions postponed demanding the implementation of an agreed methodology, and now has extended the timetable for a third time to 17 December.

IMF estimates inflation for the region to average 6.8% this year with Venezuela topping the list with 23.2% and Argentina following with the 9.9% from Indec the official stats office. For next year estimates are 28.8% and 9.7%.

Finally regarding jobs, contrary to previous reports when the IMF would estimate a reduction in unemployment, this last forecast shows a stalled situation since it forecasts the rate to remain at 7.2% in 2012 and in 2013.