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BUENOS AIRES, Feb 2 AFP

February 03 2013, 12:19AM

Argentina says it will start using a new method of measuring inflation after the International Monetary Fund censured Buenos Aires over the quality of its economic data.

Economy Minister Hernan Lorenzino told C5N television it would be "a new consumer price index to replace the current measure that has supposedly caused so many problems for the IMF."

Lorenzino said officials expected to begin using the new method starting in the last quarter of 2013.

On Friday, the IMF's executive board took the unprecedented measure of issuing a "declaration of censure" against Argentina, opening the way for one of Latin America's largest economies to lose its voting rights at the multinational lender, or even lose its membership.

But the board put off that decision, giving Buenos Aires until September 29 to resolve the problem.

"It's an ongoing process and the Fund is aware of that," said Lorenzino, who criticised the decision as a "double standard."

In a statement, his ministry suggested "many countries" have changed their unemployment and CPI measures, as well as they way they compile this data.

Official Argentine statistics are sharply different from those private sector economists issue.

For instance, last month the government said 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.

In rejecting the IMF's decision, President Cristina Kirchner's government demanded the lender's board hold a special meeting to review its policy toward Argentina and "its role in the origin of the global economic and financial crisis."

Brazil, an IMF board member and strategic ally of Argentina, criticised the censure as "counterproductive."

In a tweet, Kirchner herself suggested that her government's debt reduction policy "seems to be the real cause of anger from the IMF."

Argentina defaulted on some $US100 billion ($A96.35 billion) in debt in 2001, and has since restructured its debt twice, covering around 75 per cent of the nominal value of the bonds.

But the country is embroiled in a legal battle in the United States with hedge funds demanding that Buenos Aires repay $US1.3 billion in bonds held by investment funds NML and Aurelius because they refused to take part in a 2005 restructuring agreed to by most of the other bondholders.

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 $US9.5 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.

It has also promised not to ask for more financial aid.

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.