Argentina could become the first country excluded from the International Monetary Fund (IMF) due to repeated refusal to improve its reporting of economic figures, considered inaccurate by many independent analysts. Argentine government have until 17 December to meet IMF request, or the institution’s Council could decide to impose sanctions, according to Bloomberg.
“The Executive Council regrets the lack of progress in implementing corrective measures set at the meeting on February 1, 2012 and sent to the authorities its concern that Argentina has not met its obligations,” reads an IMF press release.
According to the IMF procedure, a country that repeatedly refuse to provide information or announce false data, may be punished by a declaration of censure. The following steps are banning the country to use Fund resources and suspension of voting rights.
Argentina’s government has been accused that official data on inflation are lower than the real ones, while figures on economic growth and industrial production are falsely announced higher that the real numbers. In addition, economists reporting inflation rates higher than the official figures are fined by the government, so they provide the data to opposition MPs. According to data announced by the government, the inflation rate was 10% in August, but independent estimates put the figure presented by the opposition around 24%, writes Financial Times. The difference between the data reported by the government and the real inflation rate cost investors almost seven billion dollars in lost yields on inflation-indexed bonds, according to ACM Consultores.
Argentina is the only member of the G20 that does not allow IMF access to its economic data, accusing the institution of pushing the country into a financial crisis which culminated in 2001 with the entry into default for a debt of $95 billion. After it paid the debt of ten billion dollars to the IMF, in 2006, the Argentine government refused to have anything to do with the organization.
“Since the country has given up the IMF funding, it didn’t lose much from this controversy, besides new problems of credibility,” the analyst Boris Segura said.
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