IMF Says Argentina’s Economic Data Remains Flawed, Extends Review For A Year

Argentina has failed to take the necessary steps in order to bring the quality of its economic statistics in line with global standards, the International Monetary Fund’s (IMF) board said on Wednesday, adding that it will extend Argentina’s review process by one year.

The IMF, which requires accurate data to analyze the world’s economies, had censured Argentina in 2013 for failing to improve its inflation and gross domestic product (GDP) figures, which put the country at risk of official sanctions that could have banned it from voting on IMF policies and from accessing financing.

The IMF said in December 2014 that Argentina, Latin America’s third-largest economy, was making progress in improving its data quality but said it must take further actions — although many analysts and private economists continued to doubt the credibility of the data — and gave it a deadline of end-February with a progress update to the IMF board on April 15.

However, the IMF board said on Wednesday that Argentina is not yet in full compliance.

“It determined that Argentina is not yet in full compliance with its obligation under Article VIII, Section 5 with respect to the accurate provision of CPI and GDP data to the Fund,” the board said in a statement.

Critics of Argentina’s government believe that the country’s second default in 12 years in 2014 has worsened the nation’s outlook, as the struggling economy has prompted the government to publish more optimistic data in order to calm markets and consumers.

The Argentine government has been accused by analysts for under-reporting inflation since early 2007 for political gain and to reduce payments on its inflation-linked debt.

Last year, the nation agreed to overhaul its consumer price index (CPI) in an effort to win back the trust of financial markets.

However, even after the index revamp, inflation data continued to fall well below analysts’ estimates, and the government had stopped listing the products that were measured, which has raised questions over how much the data is being dragged down by price controls that the government has placed on a wide array of food and household items.

Private estimates put Argentina’s inflation at close to 40 percent in 2014, whereas government figures estimate consumer prices were at 24 percent in 2014. The official rate of the Argentine peso fell by 23 percent in 2014, mostly due to a 19 percent devaluation in January 2014.

The Argentine peso has come under significant pressure since the 2008-2009 financial crisis, and as continued to fall year after year, plunging nearly 70 percent since the crisis.