Argentine President Cristina Fernandez de Kirchner used soccer terminology to lash out at International Monetary Fund chief Christine Lagarde for threatening the country with censure over disputed inflation data.
The IMF should focus on the global economic crisis and more countries should adopt Argentina’s policies to limit capital flight, Fernandez said today at the United Nations General Assembly. The IMF on Sept. 17 threatened to censure Argentina if it doesn’t improve its inflation reports by December. It would be the first time a country faces that penalty, which can end with “compulsory withdrawal” from the IMF.
Lagarde, speaking in Washington on Sept. 24, said the IMF’s decision amounted to giving South America’s second-biggest economy a “yellow card” for failing to improve inflation reports that economists say underestimate consumer price increases by almost one-third. A yellow card is typically given to a soccer player for committing a foul. A red card results in expulsion from the game.
“My country is not a soccer team, it is a sovereign country and as such is not going to accept a threat,” Fernandez said in her UN speech. “This is not a soccer game, this is the most serious economic crisis since the 1930s.”
$95 Billion Default
Argentina and the IMF have squared off since the country’s 2001 default on $95 billion of bonds, which Fernandez’s late husband and predecessor, Nestor Kirchner, blamed on the Washington-based lender.
Argentina is the only member of the Group of 20 nations that has refused to allow the IMF to do its annual review of the country’s economy, a procedure known as an Article IV consultation.
The country’s inflation data has been under question since 2007, when Kirchner began replacing personnel at the national statistics agency in a bid to “improve operations.” Last year the government fined more than a dozen researchers as much as 500,000 pesos ($107,000) each for reporting inflation rates that were higher than official data.
To avoid fines, economists now share their research with opposition lawmakers, who release a monthly report based on the data. The September report said prices rose 24 percent in August from a year earlier. Two days later, the statistics agency said annual inflation was 10 percent.
“I’m determined to make sure that we have the right data,” Lagarde said in her Washington speech. “We’ll be on the other side of the table and I hope we can avoid the red card but if the data is not suitable, is not appropriate, does not meet the standards, then all players are the same, Argentinians alike, despite how good they are at soccer.”