Argentina Files Criminal Charges Against Company For ’False’ CPI Reports
Argentina stepped up its pressure on economists who say the government has underestimated inflation in its official reports for more than four years by filing criminal charges against research company M&S Consultores SA.
Interior Commerce Secretary Guillermo Moreno filed charges against M&S on July 8, saying the company stood to profit by claiming prices in South America’s second-biggest economy are rising faster than the 9.7 percent annual rate reported by the national statistics institute. In February the government began fining economists 500,000 pesos ($121,000) for saying prices were rising as much as 25 percent per year.
“The false information generated by the consultant, intended to benefit not only the company but agents in the financial market who are clients of the company, with extraordinary profits, does damage to consumers and the state,” according to a statement on the government’s website. “If M&S were successful in convincing the community of the veracity of its inflation, we would have an annual adjustment of between 12 percent and 23 percent over current values.”
A call to M&S Consultores’s Buenos Aires office after regular business hours wasn’t answered.
Analysts including former Economy Minister Roberto Lavagna say the government’s reports have underreported inflation since January 2007, when then-President Nestor Kirchner began changing personnel at the national statistics institute in a bid to “improve operations.” The government invited the International Monetary Fund to visit the country last year to help create a new inflation index.
‘No Foundation’
“There is no foundation for these charges,” Mariano Lamothe, chief economist at Buenos Aires-based research company Abeceb.com, said in an interview yesterday. “It’s an attempt to silence the voices who since 2007 have said the government’s reports are false. It’s another way to threaten economists.”
Argentina’s inflation-linked bonds have fallen 11.7 percent this year as the government fined economists and failed to react to the recommendations made by the IMF in its report, which wasn’t made public. Similar Brazilian debt has returned 3.5 percent this year.
A group of congressmen released a report June 14 saying prices rose 23.5 percent from a year earlier, basing their data on the average estimates of eight analysts, all of whom face fines if they publish their findings.
Lawmaker Challenge
Patricia Bullrich, one of 16 lawmakers in the 257-member lower house to endorse the report, challenged Moreno at the time to fine lawmakers in the same manner as economists.
“Let’s see if Moreno fines us now, let him come fine us,” Bullrich said in an interview on Radio 10.
Graciela Bevacqua, who was fired in 2007 as head of the consumer price index division at the statistics agency, was assessed the maximum fine earlier this year. Other researchers that have been punished include Buenos Aires-based Abeceb.com, Finsoport and Estudio Bein & Asociados.
Economia & Regiones SA, based in Buenos Aires, said March 16 it will stop releasing its monthly price index because of “unjust persecution.”
