IMF censures Argentina over inflation and economic growth figures

Saturday 02 February 2013 21.50
This is the first time that the IMF has censured a member state
This is the first time that the IMF has censured a member state

The International Monetary Fund has has formally censured Argentina for failing to comply with international standards for compiling inflation and economic growth figures.

It is the first time the IMF has censured a member state, and it sets in train a process that could lead to the South American country being expelled from membership of the IMF.

This is the latest in a series of disputes between the IMF and Argentina since the country defaulted on international loans in the early part of the last decade.

Last September the IMF issued a direction to Argentina to change its statistical methods to comply with its obligations to the Fund.

But Argentina failed to comply with the demand by December's deadline, leading to the official censure.

The official inflation rate in Argentina is 11%, but private sector economist estimate the real rate at 25%.

It is an offence in Argentina to publish any inflation estimate other than the official rate.

Last week a separate administrative procedure was used by the IMF to record the fact that Argentina has not undergone an Article IV mission for almost five years.

An article IV mission is an annual visit by IMF staff to examine a member states economy, and is undergone by all IMF member states.

Separately, Argentina has been embroiled in a number of legal actions by bondholders contesting the country's defaults.

These have resulted in the country's president, Cristina Kirchner, renting a private jet to travel on official business, in case the Argentine government jet is seized by court orders obtained by bondholders.

In October the Argentine Navy's sail training vessel, the Tall Ship Libertad was detained by a court in Ghana on foot of a court order obtained by bondholders in New York