Argentine economists face fines for inflation estimates

* Economists tell lawmakers government censors them

* Additional challenges could mean new fines – analysts

* More consultants stop releasing data to avoid reprisals

 

By Luis Andres Henao

BUENOS AIRES (Reuters) – Argentina’s private economists complained to lawmakers Thursday that the government could slap them with new fines for releasing inflation estimates that are more than double the official rate.

They said the government is trying to silence them ahead of an election later this year, and some indicated the government was succeeding.

The government fined at least nine consulting firms around $120,000 each earlier this year, claiming they deceive the public with exaggerated inflation estimates.

Economists have appealed the fines but say government price watchdog Guillermo Moreno shows no sign of relenting. His office sent out another round of questionnaires demanding they explain recent comments to the press on inflation.

“They’re asking us to justify ourselves and we see it as a threat of new fines,” said Fausto Spotorno, an economist at Orlando J. Ferreres & Associates consulting firm.

“They don’t want any information that contradicts what the government says,” said Spotorno, one of several economists who spoke at a freedom of speech committee meeting organized by opposition lawmakers in Congress.

Economists and even some state statisticians say the government has low-balled inflation since 2007 for political gain and to lower inflation-linked debt payments. Data on growth, poverty and unemployment has also been questioned.

Annual consumer inflation is estimated privately at above 20 percent, one of the world’s highest rates, whereas the government reported a 9.7 percent rise through April .

More and more consultants are deciding to remain silent rather than risk reprisals. They say President Cristina Fernandez does not want independent data to sway voters ahead of an October election, in which she will likely run.

“They won the battle,” said a consultant who asked not to be named. “We had decided to only release our inflation estimates after the (official) figure was published. Now, we’ve decided not to release it at all.”

Officials at Moreno’s Domestic Commerce Secretariat could not be reached for comment.

Moreno, a powerful government secretary known for cowing business executives into submission, first ordered economists to reveal how they calculated inflation and then fined them under a law on deceptive commercial practices.

The government is now going after economists’ statements to local newspapers and radio stations. State news agency Telam reported that consultants could face criminal charges and even prison terms.

“I’m going to continue to talk to the press (about prices) and exercise my freedom of speech,” said Jorge Todesca of Finsoport consultancy, who is running for mayor of Buenos Aires on an opposition ticket. “I won’t accept intimidation.”

Other firms that could face new fines include Estudio Bein & Associates, FIEL, M&S Consultores and Graciela Bevacqua, who headed the INDEC statistic agency’s consumer price unit until she was ousted in early 2007.

“You don’t have to be an economist to realize that prices are rising every day in Argentina,” said Silvana Giudici, an opposition lawmaker who heads the freedom of speech committee.

“This is a reality that the government wants to dismiss, first through the dismantling of the INDEC and now through the silencing of anyone who thinks differently,” she said.

“The government’s objective is to impede not only the release but the drafting of any indices or statistics that don’t come from the official statistics agency,” said another consultant who asked not to be named.

“Today it’s the consumer price index but tomorrow they could go after GDP, industrial output and any other privately released indicator.”