May 24, 2013
IMF ‘censures’ Argentina over INDEC data
Argentina became the first country censured by the International Monetary Fund for not sharing accurate data on inflation and economic growth under a procedure which could end in expulsion.
The vote of no confidence was adopted yesterday by the IMF’s 24-member board of directors, the Fund said in a statement. While having no immediate effect, the decision takes the country a step closer to sanctions including barred access to IMF loans.
“The Executive Board found that Argentina’s progress in implementing the remedial measures since the September 17, 2012 Board Meeting has not been sufficient. As a result, the Fund has issued a declaration of censure against Argentina in connection with its breach of obligation to the Fund under the Articles of Agreement,” read the statement.
The Board called on Argentina to adopt the remedial measures no later than September 29, 2013.
The IMF’s executive board found that Argentina’s progress in implementing so-called remedial measures “has not been sufficient,” according to the statement. The board called on Argentina to “address the inaccuracy” of economic data no later than September 29. Managing Director Christine Lagarde is required to report to the board on Argentina’s progress by November 13.
“The Fund stands ready to continue its dialogue with the Argentine authorities to improve the quality of the official CPI-GBA and GDP data, and, more generally, to strengthen the relationship between Argentina and the Fund.”
The censure followed several attempts to obtain from Argentina information deemed good enough by the IMF to perform economic surveillance. President Cristina Fernández de Kirchner has denied any wrongdoing even as the national government’s official figures have been disputed by the IMF, economists and politicians since 2007.
That’s when her late husband and then president Néstor Kirchner replaced senior staff at the statistics bureau, known as INDEC. While private forecasters estimate that inflation accelerated in 2012 to 25.6 percent, the government’s national statistics bureau INDEC said consumer prices rose 10.8 percent.
Sanctions may follow later, such as declaring the country ineligible to use the fund’s general resources and suspending its voting rights. “Compulsory withdrawal” is the last step of the procedure, which leaves time between each decision for the country to address concerns.
— Herald with Bloomberg News, IMF.org