By Jorge Otaola
BUENOS AIRES, Feb 3 (Reuters) – The resignation of the head of Argentina’s statistics agency and the delayed start of a revised method for measuring inflation hit local assets on Tuesday.
Marco Lavagna stepped down from the National Institute of Statistics and Censuses (INDEC) on Monday, saying it was “time to take on new projects and challenges.”
Economy Minister Luis Caputo told a local radio station on Monday that Lavagna resigned because he wanted to roll out a new formula to measure inflation immediately while the executive branch preferred to wait.
Lavagna did not immediately respond to a request for comment.
“With (President Javier Milei) we always had the vision that the change needed to be implemented once the process of disinflation had been totally established,” Caputo said.
Under Milei’s government, sweeping austerity measures have reduced double-digit monthly inflation to under 3%.
INDEC had announced in October that the updated method would be implemented in January. Caputo on Monday did not give a new date.
He said the change would produce practically the same results, however, market sources told Reuters they expected it would show a substantially higher inflation rate. The current methodology dates back to 2004.
Argentina’s ‘country risk’ edged up to 496 basis points on Tuesday after last week touching its tightest since mid-2018. The local stock index benchmark (.MERV) was down for a fifth consecutive session after losing 2.9% on Monday due to profit-taking and the change at INDEC, traders said.
International dollar bonds were mixed across the curve, with marginal price moves in both directions.
Statistical data is a sensitive topic in Argentina because of the massive underreporting of inflation in the 2000s and 2010s, for which Argentina was censured by the International Monetary Fund.
The IMF did not immediately respond to a request for comment on any implications of the delay on the current program between the Washington lender and Argentina.
“It took a lot of effort to regain statistical credibility, and that’s why the current situation is a terrible sign,” economist Marcelo Rojas told Reuters. “Doubts are resurfacing that the government will interfere with statistical data again.”
The government has said it expects January’s inflation could be around 2.5%, compared to 2.8% in December. It would be around 3.2% if the updated methodology was used for the consumer price index (CPI), according to market sources.
(Reporting by Jorge Otaola; additional reporting by Rodrigo Campos; editing by Hernán Nessi, Leila Miller, Alexandra Hudson)
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