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The IMF will criticize INDEC, but imminent sanctions are not expected
La Nacion
January 27, 2012

By Martin Kanenguiser

The organization will ask for faster normalization of statistics; the government is confident

With criticism, but without immediate sanctions, the International Monetary Fund (IMF) will let its position be known on Wednesday about the situation of Argentina's statistics, after demanding six months ago that the government align the GDP and inflation figures with international standards.

IMF spokesman David Hawley said yesterday at a press conference that they will discuss the matter in the coming days and that then they will put out a statement about this controversial question.

The board led by Christine Lagarde will evaluate the report that the staff of the organization prepared for them about the cooperation that has unfolded with the National Institute of Statistics and Census (INDEC).

As such, government sources said to the Telam news agency that on Wednesday of next week, there will be a "discussion around Argentina's statistics," and expressed their confidence in the possibility of "a positive result for the country in said meeting."

The feeling is based on the statement from two weeks ago from another IMF spokesman, Gerry Rice, who said that "no sanction will take place" against the country at the meeting, despite some member countries pushing for punishment over not publishing statistics aligned with international standards.

Progress has been talked about there over a new consumer price index (CPI) in 2012, as INDEC has already stated, and the discussions around the measuring of GDP which, equal to what is happening with private consultants, is generating doubts at the IMF.

A source from a major member of the board and a staff member confirmed to LA NACION that there will be no requests for sanctions because the process of cooperation with the INDEC is ongoing and because it still has not been determined how grave the alterations to the statistics are, similar to what is going on in local courts.

Nevertheless, they states that this doesn't mean there won't be sanctions later on if there is no concrete progress, which could take some more months.

In Buenos Aires, according to what LA NACION could learn, the government is confident that the IMF's statement will be positive, while there will certainly be differences in terms of the speed in applying the reforms that the IMF is asking for. As an example of good will this first quarter the National Survey on Household Spending of 2004 will be applied, which was never applied, together with the field work necessary to put the new national CPI into practice.

In the government they believe that, due to the delicate situation in Greece in particular, and for Europe in general, this progress will have to be sufficient to avoid an explicit condemnation for Argentina in that board meeting.

With the same optimism they downplayed the chance that the U.S. will apply sanctions in the short term, through the withdrawal of tariff benefits from the generalized system of preferences (GSP), over the failure to pay two rulings against Argentina won by American investors at the International Center for the Settlement of Investor Disputes (ICSID).

The arguments

Two arguments argue this position: Argentina will pay the US$300 million that is demanded, but within the country and under orders of a local judge instead of the request by the creditors to collect abroad and, also, the U.S. has a surplus that it certainly wants to maintain.

"The US$60 million from GSP are insignificant compared to the US$4 billion of surplus that they have with Argentina and that could be reduced if, as President Cristina Kirchner said, retaliation is applied against withdrawal of GSP," it is said.

In parallel, those in government also expect that pressure from the vulture funds on Argentina's debt in default could moderate once an agreement is reached in the delicate Greek situation.

In that country, they said, the Dart and Elliot funds are also there trying to boycott the pact to avoid a default, from which a stronger position could emerge from the creditor countries against those serial holdouts, who are helping the lawsuits against Argentina.

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