Welcome To Argentina, Where It's A Criminal offence To Report The Rate Of Inflation

Argentina Cristina Kirchner

Photo: Casa Rosada

Argentina is filing criminal charges against economists at MyS Consultores for publishing false information about the country’s inflation data, according to The Wall Street Journal.The complaint also claims that the company’s data caused speculative behaviour in the bond market. Doctored data is reported to have cost investors in the country’s inflation-linked bonds $2.3 billion, in 2010.

Guillermo Moreno, the secretary of domestic trade first sent economists and consultants letters ordering them to reveal their methodology on price indices back in February. Those who agreed had their methodology analysed by INDEC, Argentina’s national statistics and censuses institute and were found to have flawed approach. Nine firms were ordered fined $123,000 each.

A judge is said to be mulling the charges as he decided whether they’re worth investigating and it remains unclear if or how much jail time the economists could get.

Argentine President Cristina Fernandez de Kirchner and her government however have been accused of censoring independent firms that publish unfavorable economic data that rivals government findings, ahead of the October 23 presidential election. If that is in fact the end game, it seems to be working. WSJ reported that consulting firm Economia y Regiones said it no longer make its inflation estimates available to the public.

Reuters reported that inflation figures have been under-reported since the government appointed a political ally as the head of INDEC in 2007. Inflation is supposed to be as high as 25% against the 9.7% reported by INDEC. And economists argue that rampant fiscal spending, a booming economy (its expected to grow at 8.2% this year) and massive wage hikes, all point to inflation.

Meanwhile, Argentina which has refused to allow the IMF to conduct its annual economic review in the country since 2006, accusing the organisation’s policies of causing its economic crisis in 2001-2002, is said to be working with the group to meet IMF standards. The IMF executive board met yesterday to go over Argentina’s quality of reporting of official CPI and GDP data, and to see if it met IMF standards.

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