Discussions have already begun between the International Monetary Fund and the Argentine authorities on the fourth review of the programme started and this week a delegation will travel to Buenos Aires of the organism to advance in conversations for a new outlay of US$ 5,400 million.
The technical teams already are virtually checking the numbers of the economy in the last stretch of 2022 – the period covered by the fourth review – and, even if it is estimated that the objectives of the program would have been achieved by the end of the year, the emphasis will be placed in the panorama they project for this 2023, which appears more difficult.
As a spokesman for the Fund pointed out on Monday, “the work and communication between the IMF technical team and the authorities continues smoothly on all relevant issues and initiatives”.
“In line with previous reviews, technical discussions on the fourth revision of the program have begun in a hybrid format,” he added, i.e. virtually and in person.
In this sense, he specified that «it is foreseen that a small IMF technical team visit Buenos Aires this week to continue these discussions, and may this be followed by a visit by the authorities to Washington, DC later this month to finalize the technical work.”
The spokesman did not specify whether Luis Cubeddu, the head of the delegation for Argentina, will travel to Buenos Aires, but it is estimated that if the delegation were “small” it would not be among the members. In any case, Cubeddu could follow all the deliberations from Washington.
As usual, IMF officials will meet with Minister Sergio Massa’s economic team and move forward in reviewing the numbers to see if Argentina has met the targets it committed to in the program.
Shortly before Christmas, the agency’s board of directors had given the green light to the third review, which lasted until September. Fiscal and monetary targets as of September 30th have been satisfied, The Fund then advised and stated that the targets “were on track” towards the end of the year, the period covered by the fourth review. Although they have applied a waiver or a waiver for the “trick” of the multiplicity of types of dollars, they estimated that this was a temporary measure that would be lifted as soon as possible.
At the time they indicated that although there had been “advances”, Argentina’s macroeconomic situation “is still fragile” and they warned that “solid implementation of the program is essential for the future”.
They especially highlighted the fiscal adjustment, which is expected to end in 2022 with a deficit of 2.5% of GDP and for it to be reduced to 1.9% in 2023. They said “fiscal consolidation must be underpinned by efforts to continue to mobilize revenues, tighten spending controls and timely improve the target of subsidies and social assistance “.
As far as reserves are concerned, the program foresees that there is a of 5,000 million dollars at the end of 2022 and this year should close with 9,800 million in the coffers.
Although the December numbers are estimated to close well, the reserve targets for this year appear more complicated, due to the drought which would complicate harvest revenues and also due to the debt-relief program announced by Minister Massa, who has on alert to the Fund.
This was warned in a report to Reuters by the deputy director of the western hemisphere department, Nigel Chalk, when he said he hoped that this decision would not jeopardize the accumulation of reserves.
Chalk said the IMF “is working with the Argentine authorities on this debt buyback plan. First about the scope of the operation, how it is managed and then how it fits into the schedule.
Furthermore, the official explained that the numbers for 2022 will now be revised. “But obviously it has an element of vision for the future. And we want rest assured that the reserve target will also be achieved,” underlined.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.