BUENOS AIRES, Feb 3 - The sudden departure of the director of Argentina's National Institute of Statistics and Censuses (INDEC) and the postponement of a planned update to how inflation is measured intensified market unease on Tuesday.
Marco Lavagna resigned from his post on Monday, citing that it was "time to take on new projects and challenges." Economy Minister Luis Caputo said on a local radio broadcast that Lavagna stepped down because he wanted to apply a new formula for measuring inflation immediately, whereas the executive branch favored deferring that rollout. Lavagna did not respond right away to a request for comment.
Caputo said the administration had agreed with President Javier Milei that the methodological change should be introduced only after a clear disinflation process was in place. Under the current government, a series of fiscal and policy adjustments have reduced monthly inflation from double-digit rates to below 3%.
INDEC had previously announced in October that the updated methodology would take effect in January, but Caputo did not give a new implementation date on Monday. He did, however, assert that the revised approach would deliver almost identical outcomes. Market participants who spoke with Reuters anticipate the updated method would yield a materially higher inflation rate.
The methodology currently in use dates back to 2004.
Financial market reverberations were visible on Tuesday. Argentina's country risk measure rose to 496 basis points after having reached its tightest levels since mid-2018 the prior week. The local benchmark stock index (.MERV) extended a losing streak to five sessions following a 2.9% drop on Monday, which traders attributed to profit-taking and uncertainty sparked by the change at INDEC. International dollar-denominated bonds showed mixed moves along the curve, with only marginal price shifts either way.
Statistical integrity is a particularly sensitive subject in Argentina because of extensive underreporting of inflation in the 2000s and 2010s, a period that led to formal censure by the International Monetary Fund. The IMF did not immediately respond to a request for comment about any potential consequences of the delay for the lender's current program with Argentina.
Economist Marcelo Rojas told Reuters that considerable work had been required to restore credibility to official statistics, and described the present turn of events as a "terrible sign." He warned that doubts were re-emerging about possible government interference in data.
The government has said January's inflation could be around 2.5%, compared with 2.8% in December. Market sources estimate that applying the updated methodology to the CPI would raise January's figure to about 3.2%.
Contextual note: Market participants and analysts quoted in these developments emphasize how sensitive Argentina's asset prices are to perceptions of statistical independence and transparency. The immediate market responses included a widening of sovereign risk premiums, a pullback in equities, and muted, mixed activity in international bond markets.