ING: International Monetary Fund Data Are Wrong

• The data refer to the short-term external debt of some Eastern European countries.

Andreea Arăboaei

Analysts of the Dutch financial group ING have identified serious errors in the International Monetary Fund data regarding the short-term external debt of some Eastern European countries including the Czech Republic and Poland. As the real data were much deteriorated, increased pressure was put on the risk perception of the respective countries, according to Charles Robertson, ING"s Chief Economist for Emerging Markets. The IMF subsequently announced the correction of the errors concerning the Czech Republic, Estonia and Ukraine, but not Poland, Robertson informed. He is also expecting corrections regarding Lithuania. Banking market sources said no errors had been reported concerning IMF data on Romania.

The data in question reflected the 2009 external debt refinancing needs of some emerging countries as a ratio of their foreign exchange reserves. The IMF announced a ratio of 236% for the Czech Republic instead of the real 89%, 210% for Estonia instead of 132% and 208% for Ukraine instead of 116%. The figures released for Poland also seem much exaggerated, as the ING analysts believe that Poland and the Czech Republic are among the safest economies in Europe.

"We challenged the figures released for the Czech Republic and Poland, which we consider to be the safest economies in Europe, while the IMF data showed that they were going to have major problems. Even this morning (i.e. yesterday morning), I heard the IMF say there were indeed errors in their calculations and that they would publish corrections," the ING analyst said.

It is highly important to have the IMF data on Central and Eastern Europe corrected, ING analysts believe, considering the Western banks" exposure on Eastern European markets. Additionally, the GDP of Poland and the Czech Republic combined equals nearly 60% of the regional GDP.

"There are already IMF assistance programmes for Romania, Hungary and Latvia, which means that 90% of the Central and Eastern Europe GDP is safe anyway or safer due to IMF support. Therefore, although Austrian banks and not only are exposed in these countries and will suffer because of an increase in the volume of bad loans, the problems of these countries are not as great as people fear," the ING report wrote.

If the IMF data were correct, only 31% of the regional GDP would be "safe," the ING analysts added.