IMF describes progress in Argentina under the government of Javier Milei as 'impressive'

A spokeswoman for the International Monetary Fund (IMF) assured this Thursday that the Progress achieved by the government of Argentine President Javier Milei is “impressive”, but “the path to stabilization is never easy.”

The financial organization has supported Milei since he took office in Decemberwith the goal of reaching a zero deficit in 2024, even if it entails a “chainsaw” plan to cut spending.

“The progress so far has been impressive,” said Julie Kozack, director of communications for the Fund.

“In January and February, a fiscal surplus was recorded for the first time in more than a decade, international reserves are being reconstituted, “Inflation is falling faster than expected and market indicators such as the exchange rate gap and the sovereign spread continue to improve,” said. The sovereign spread is the cost of a country's external borrowing.

Argentine authorities implement “an ambitious stabilization plan” macroeconomic strategy focused on “a strong fiscal anchor” that eliminates any financing of the government by the central bank, and policies aimed at reducing inflation and rebuilding reserves, he explained at a press conference in Washington.

But “the path to (economic) stabilization is never easy and requires strong policy implementation,” the spokesperson added.

For the IMF it is important to “continue improving the quality of fiscal adjustment” and adapt monetary policy during the “transition.”

In a country with more than 12 million poor people (41.7% of the population), the financial organization applauds “the authorities' recent efforts to expand social assistance in the flagship, well-targeted child benefit program, as well as to protect the real value of pensions.

The Monetary Fund, however, urged Milei to work to gain social and political support that will allow him to guarantee the durability of the economic reforms it is implementing.

“It remains important to work pragmatically to generate social and political support to help ensure the durability and effectiveness of the reforms,” ​​said the spokesperson, as public sector unions take to the streets in
protest against the dismissal of almost 15,000 officials.

The Executive of Alberto Fernández (2019-2023) signed an agreement with the IMF in March 2022 to refinance the debt contracted in 2018 during the mandate of the conservative Mauricio Macri (2015-2019) for about 45,000 million dollars that included ten quarterly reviews .

The Fund's objective remains to support the authority's efforts to restore macroeconomic stability

The IMF board approved on February 1 to extend the agreement with Argentina until December 31, 2024 and to recalibrate the disbursements planned within the resource allocation of the current program.

Last January, the seventh review was agreed upon, which allowed the disbursement of 4.7 billion dollars, the first under the mandate of President Javier Milei.

Kozack denied this Thursday that there are negotiations for a new debt refinancing agreement with Argentina and stated that work is currently being done on the current program, which will be valid until the end of this year. “At this time, it would be premature to discuss the modalities of a possible future program,” he said.

The IMF team and the Argentine authorities “are participating in active discussions in the context of the current IMF-supported program,” said Kozack, who assured that the objective of the Fund remains to “support the authority's efforts to restore macroeconomic stability and lay the foundations for prosperous and inclusive growth in Argentina.”

AFP and EFE