Politics, Business & Culture in the Americas

Argentina Reacts to IMF Warning

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In a speech during the United Nations General Assembly in New York, Argentine President Cristina Fernández de Kirchner replied to the IMF’s warning of sanctions by rejecting its claims that the country is going through a rough economic situation.

International Monetary Fund Managing Director Christine Lagarde warned Argentina during a conference at the Peterson Institute in Washington DC on Monday that it could face sanctions unless it shares reliable information on the country’s growth and inflation rate. According to private economists, the annual inflation in the South American country is at 24 percent, much higher than the official figure placed at 10 percent.

After an Executive Board Meeting on September 17, the IMF expressed its concern due to “the lack of sufficient progress” in improving the quality of the data for the Consumer Price Index for Greater Buenos Aires (CPI-GBA) and Gross Domestic Product (GDP) and called on Argentina to comply with its obligations as a member of the multilateral organization.

Lagarde gave an ultimatum to the Argentine government by saying that if the problem hasn’t been addressed by December 17, it could face a “red card”, meaning it would be dismissed from the multilateral organization. “Argentina is good in football and it certainly understands what we are talking about,” she added. The Argentine president responded at the UN General Assembly: “”My country is not a soccer team. It is a sovereign nation that takes sovereign decisions; therefore we will not be subject to any pressure, let alone to any threat.”

The Argentine Minister of the Economy, Hernán Lorenzino, explained that Argentina’s relationship with the IMF is and will continue to be of technical assistance, and that despite the claims of the country’s loss of competitiveness, the government will not change its currency control regime and is not planning to devaluate the peso. Despite Lorenzino’s and other economists’ claims that the economic landscape will improve in 2013, higher insecurity, nationalizations, import restrictions and a constitutional reform led thousands of citizens to take the streets to protest on September.

Tags: Argentina, Christine Lagarde, International Monetary Fund
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