Chile’s Statistics Head Resigns Amid Census Data Criticism

The Chilean government’s chief statistician resigned today amid accusations of irregularities in compiling the country’s last census and criticism of the methodology for measuring consumer prices.

Francisco Labbe stepped down as head of the National Statistics Institute, known as INE, Deputy Economy Minister Tomas Flores told reporters in Santiago today in images transmitted live on state television station TVN.

INE, which also publishes economic data including inflation and unemployment, didn’t commit errors or manipulate data in the latest census, Labbe said in an e-mailed response to an article published today on the Ciper Chile website. Earlier this month INE employees said in a letter that the methodology for measuring consumer prices was outdated while analysts said inflation may be underreported by as much as half.

“If there is a possibility of a manipulation of the census, then that must be investigated,” Flores said. “We can’t rule out” repeating the census, he said.

In a letter received by Bloomberg April 17, INE division chiefs said Labbe had dismissed recommendations made to modernize the inflation measuring methodology.

Institute employees have been studying ways to improve the inflation methodology and consulted an international expert after they raised questions in 2010 about clothing prices, which have fallen faster than any other item, according to the letter. Labbe’s refusal to accept their recommendations hurts the institute’s credibility as analysts question their reports, the officials said.

Analysts including Morgan Stanley’s Luis Arcentales and Jorge Selaive, a chief economist at Banco Bilbao Vizcaya Argentaria SA (BBVA), have questioned the institute’s methodology for measuring prices, with the latter saying annual inflation would be closer to 3 percent than the 1.5 percent reported in March.

While Finance Minister Felipe Larrain said today that the government is open to improving statistics methodologies, he called for “responsibility” in denouncing the agency.

To contact the reporter on this story: Randall Woods in Santiago at rwoods13@bloomberg.net; Eduardo Thomson in Santiago at Ethomson1@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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