Argentina: IMF censures Argentina on inaccurate data
February 15, 2013
On 1 February, Argentina became the fist country ever to be censured by the International Monetary Fund (IMF) for not supplying accurate economic data. The decision came in after Argentina failed to meet a three-month deadline set by the IMF in September 2012 in order for the country to improve the quality of its official statistics and, in particular, of its inflation and gross domestic product (GDP) figures. Argentinean authorities have now until 29 September to address the inaccuracy of the data, and to comply with the Fund's rules for statistical reporting. Further delay in the adoption of remedial measures may result in sanctions, including the ineligibility to use the IMF's resources, the suspension of voting rights and even the possibility of a "compulsory withdrawal".
Official economic data published by the National Statistics Institute (INDEC) have been met with suspicion ever since a controversial methodological change was implemented in 2008. The government has repeatedly denied allegations that INDEC data are manipulated and, in March 2011, went a step further by fining a number of consulting firms for publishing their own independent inflation estimates. Following the IMF decision, however, Economy Minister Hernan Lorenzino announced that economic authorities are working on a new inflation index to replace the current measure. The new inflation gauge, which will take into account the whole country and not only the Great Buenos Aires area, will be operative in the fourth quarter of 2013, thus in time for the IMF's decision.
Amid spiralling inflation, the government is currently locked in wage talks with trade unions, which request wages to be raised in line with private analysts' inflation estimates. The government hopes to limit wage hikes to 20%, against unions' demands for a 25-30% rise. Against this backdrop, on 4 February, the Minister of Commerce announced an agreement with the main country's supermarket chains in order to freeze prices on all products until April 1.
Author: Armando Ciccarelli, Head of Data Solutions