Argentina: IMF warns Argentina over inaccurate data
October 12, 2012
In September, consumer prices for the Great Buenos Aires area added 0.9% over the previous month, which mirrored the result recorded in August. The monthly increase was driven by higher prices for healthcare, as well as for clothing and footwear. Despite the monthly rise, annual headline inflation was unchanged in September at the 10.0% recorded in August, which had marked the highest level in 18 months. Official inflation data published by the National Statistics Institute (INDEC) has been met with suspicion ever since a controversial methodological change was implemented in 2008. As a result, private sector analysts report their own independent inflation estimates, which differ notably from the official figures. The government has repeatedly denied allegations that INDEC data is manipulated and, in March 2011, went a step further by fining a number of consulting firms for publishing their inflation estimates. That said, the IMF is also sceptical about official inflation data and, on 17 September, the Fund gave yet another three-month deadline to Argentinean authorities to implement specific measures in order to improve inflation data quality. The IMF had already given local authorities 180 days to improve their inflation data in February. According to IMF rules, failure to meet the present deadline could result in a declaration of censure, a warning that the Fund has never before issued. In addition, the move may be followed by sanctions if the adoption of remedial measures is delayed further, which include the ineligibility to use the IMF's resources and the suspension of the voting rights.