The IMF confirms that the objectives of the program will “not change”

The International Monetary Fund said on Tuesday that it now needs to see the implementation of the program in Argentina and that the goals of the program “they won’t change”. “We will support the Argentine authorities so that they can prioritize meeting the goals and objectives of the program,” they assured.

At a press conference on prospects in the Western Hemisphere, in the framework of the Spring Assembly of the FundIlan Goldfajndirector of the agency’s regional department, said about Argentina’s program that “it has been approved and now we need to see implementation, begin to respond to the needs of Argentines ”.

“The tests are normal, it happens in all programs and that’s the case in Argentina,” he said. “We’re now looking at priorities, what are the steps that should be prioritized to ensure that the program, the objectives of the program are achieved. They will not change. “

“We will support the Argentine authorities so that they prioritize meeting the goals and objectives of the program. There were dialogues and negotiations with the authorities in Washington. This will continue and we hope to complete the review in May. “

Minister Martín Guzmán was in the U.S. capital last week seeking to “reprioritize” – the same word Goldfajn used – some aspects of the program due to the events of the war. The minister also assured journalists that the goals would not change.

Asked about the price increase, Goldfajn pointed that out “As in many other countries, Argentina has experienced a global inflation shock”and added that “in terms of social safety net and energy, the recommendation is similar to what we have seen in other countries: we must prioritize the hardest, protect the most vulnerable and make sure financial conditions are respected. “

Goldfajn later clarified that “there are assumptions to the program and objectives, and inflation is one of the assumptions of the framework and the objectives are fiscal, monetary, financial, structural objectives ”. The IMF estimates inflation for Argentina this year at 48%, similar to its calculation for the program, although the private sector considers it to rise to 60% or more.

“Assumptions can change due to the new economic framework coming from the global economy, new shocks. These are assumptions that form the framework. The goals are fiscal, reserve, structural and those will not change because the program has goals and what we need to do is help the authorities prioritize those steps to meet those goals ”.

In a regional report released on Friday, the IMF warned of that “Latin America faces unusually high risk” and that the war in Ukraine, rising inflation, tighter financial conditions, economic slowdown among major trading partners, and social unrest could exacerbate the region’s growth prospects.

In a blog published this Friday by economists Santiago Acosta-Ormaechea, Ilan Goldfajn and Jorge Roldós, from the Western Hemisphere Department, the IMF pointed out that the war in Ukraine is confusing the world economy and raising uncertainty about on prospects for Latin America and the Caribbean.

Even before the war, growth in the region was running out of steam. After last year’s rebound, growth slowed to 2.5% in 2022. Exports and investments continue their role as the main engine of growth, but central banks will need to tighten monetary policy to combat rising inflation, the report says.

The impact is felt in Latin America mainly by rising inflation, which affects real incomes, especially for the most vulnerable.

The Fund forecasts that Brazil’s economy will slow to 0.8% this year, after growing 4.6% last year. Mexico’s economy will also fall by 2%. Colombia is likely to see a smaller slowdown with growth of 5.8%, while growth in Chile and Peru will be 1.5%and 3%, respectively.

Poverty and inequality remain major concerns, due to the unequal impact of rising inflation on the population.

To ensure social cohesion and reduce the risk of social tension, “governments should provide targeted and temporary support to low-income and poor households, and let local prices adjust based on international ones. price, “the report said. It will help vulnerable groups and contain financial costs, in addition to encouraging production and moderating consumption, they point out.

“Integration needs to be inclusive”, said the Fund. “Countries need to ensure the sustainability of public finances to help maintain their credibility and rebuild the financial space. But it will also be important to adopt measures that protect the most vulnerable.

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