Washington: The International Monetary Fund censured Argentina on Friday for failing to supply accurate economic data, the first time ever that the fund has taken such an action against a member.
But the board appeared to set aside taking any stronger action for the rest of this year, giving Buenos Aires more time to repair its relations with the global crisis lender.
The IMF executive board found that Argentina’s efforts to meet its demands for better GDP and inflation data have “not been sufficient. As a result, the fund has issued a declaration of censure against Argentina.”
The censure decision opened the way to Argentina possibly losing its voting rights at the IMF, or even losing it membership, although the board put off that decision put off that decision and gave Buenos Aires another eight months to resolve the problem before it takes further action.
The Argentine government has until September 29 to meet its requirements and IMF managing director Christine Lagarde will then have to report on the issue to the board by November 13.
“The fund stands ready to continue its dialogue with the Argentine authorities to improve the quality” of the official data, the board said in a statement. The fund is also ready, “more generally, to strengthen the relationship between Argentina and the fund,” it added.
In September, the IMF laid out a tough warning to Argentina that it would be punished for failing to meet, since 2011, its obligations to supply the same accurate economic data that all countries provide.
The official Argentine statistics are sharply different from those private sector economists issue. For instance, last month the government said that inflation in 2012 was 10.8 per cent, while a group of private economists who collate their data put the rate at 25.6 per cent.
Buenos Aires benefits from understating the data because a large part of its sovereign debt is indexed to inflation.
The IMF and Argentina have a long history of troubled relations, with successive governments blaming the fund for domestic economic failures and the country’s deep troubles in international debt markets.
In January 2006, the government paid off Argentina’s debt with the IMF — some $9.5 billion (Dh34.89 billion) — and cut links with the fund.
Since then Argentina has been the only country in the G20 that does not allow annual economic assessments by official IMF teams.
But at the end of 2010, the IMF was invited back to assist with collection and formulation of economic data, opening the way to the current impasse.