International Monetary Fund management today gave a report to the fund’s executive board on Argentina’s progress in addressing concerns over its official data, leaving it to the 24 executive directors to decide next month whether to censure the country.
“I expect this report will be given due consideration by the Board sometime in late January’,” Gerry Rice, the director of the IMF’s external relations, said in an emailed statement. “The fund has no further comment on the report and its contents at this time.”
Argentina is on track to be the first country ever censured by the Washington-based fund for not sharing accurate data about inflation and economic growth under a procedure that can end in expulsion from the IMF. The board in September called on the government to implement remedial measures “without delay” and asked Managing Director Christine Lagarde to inform directors on progress by today.
President Cristina Fernandez de Kirchner has denied any wrongdoing even as the government’s official figures have been disputed by the IMF, economists and politicians since 2007.
That’s when her late husband and former President Nestor Kirchner replaced senior staff at the statistics institute, known as Indec. Since then, Argentina has reported average inflation of 8.8 percent a year, versus a 23 percent estimate by private economists.
The official inflation rate of 10.6 percent in November, less than half the private estimates, has enabled Argentina to save about $6.8 billion since 2007 on debt payments, according to Buenos Aires-based research firm ACM Consultores.
According to IMF rules for countries that either fail to provide information or provide inaccurate information, a declaration of censure may follow several failed attempts to have the country that breached its obligations take remedial measures.
The board in September said it “may consider additional steps based on Argentina’s response, and in line with IMF procedures.”
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.
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