November 9, 2016 / 10:00 PM / 3 years ago

UPDATE 2-IMF lifts censure on Argentina's official statistics agency

(Recasts; adds economic background and statement from Indec; adds byline)

By Hugh Bronstein and Maximiliano Rizzi

BUENOS AIRES, Nov 9 (Reuters) - Argentina can be trusted to provide accurate inflation estimates, the International Monetary Fund said on Wednesday as it lifted its censure of the government’s Indec statistics agency, which had published questionable consumer price data for years.

President Mauricio Macri won office last year on a free-markets platform that included revamping Indec, which had long been accused by private economists of publishing inflation data manipulated to make the economy look better than it was under previous President Cristina Hernandez.

“Today’s IMF board decision to remove the Declaration of Censure is a testament to the extraordinary efforts made by the new Argentinean administration to strengthen the national statistics agency and produce reliable and trustworthy data,” IMF chief Christine Lagarde said in a statement.

The IMF’s censure had put Argentina at risk of official sanctions that could have barred it from accessing financing.

According to Indec, consumer prices rose 1.1 percent in September. October’s inflation numbers are set to come out on Thursday.

“The lifting of the censure will help consolidate the restitution of public statistics, which Indec began in December 2015,” the statistics agency said in a statement.

Just after his inauguration last December, Macri ordered reforms aimed at increasing confidence in Latin America’s No. 3 economy. He reduced energy subsidies, ditched grains export taxes and lifted currency controls, allowing the peso to weaken by more than 30 percent against the U.S. dollar.

But the economic revival and wave of foreign direct investment that he promised would come in the second half of this year have been slow to arrive.

Argentina is in recession and consumer prices are rising at a double-digit pace, although the rate of increase has slowed as the central bank’s new inflation targeting policy takes hold.

The bank lowered its reference rate by 50 basis points to 26.25 percent on Tuesday, citing lower inflation expectations. Analysts polled by the bank this month said they expect inflation of 19.8 percent over the 12 months ahead, down from 21.3 percent in the prior month’s survey.

Editing by James Dalgleish and Leslie Adler

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