President Mauricio Macri of Argentina has become a market favourite by undoing many of the heavy-handed policies of his predecessor. But now some bond analysts say that he’s taking a page out of her playbook.
Last week, the government said it will change the way it measures the economy, sparking concern that holders of warrants tied to Argentina’s growth will get fewer payouts. It also said it will use a different consumer price index, which shows less inflation, to determine payments on inflation-linked bonds.
The revisions sparked a selloff in the so-called GDP warrants as a sense of deja vu descended over investors who had regained confidence in Argentina with Macri’s election in November. During Cristina Fernandez de Kirchner’s tenure, the credibility of economic data was repeatedly questioned.
Many investors and analysts were convinced the government manipulated the data to reduce bondholder payments. The International Monetary Fund even took the unprecedented step of censuring Argentina for inaccurate statistics in 2013.
The Finance Ministry referred questions about economic data to the statistics agency, which declined to comment on comparisons with the previous administration. Argentina’s economic data is being overhauled after years of distortions. The GDP revision is in line with this mandate.