He International Monetary Fund On Thursday he said he saw a “impressive progress” in the Argentine economy and praised the progress made fiscal terms, international reserves and inflation. However, he warned that the path to stabilization is “not easy” and that it is necessary a “firm” application of the measures. He also reiterated the need to improve the “quality of fiscal adjustment”.
At a press conference in Washington, the Fund’s communications director, Julie Kozackanswered some questions about the first economic steps towards stabilization of the government of Javier Milei, shortly before Minister Luis Caputo and his team arrived in the capital for the Spring Assembly of the Organization and the World Bank, from 15 to 20 April , and also to continue with the negotiation of the program.
“The Argentine authorities are implementing an ambitious stabilization plan to restore macroeconomic stability and, as known, the plan focuses on creating a strong fiscal anchor that eliminates public financing from the Central Bank together with policies that reduce inflation, restore reservations and other impediments to growth that have persisted in the past,” Kozack said.
And he added praise for the Government: “The progress has been impressive. In January and February, a fiscal surplus was recorded for the first time in a decade. International reserves are recovering. Inflation is falling faster than expected and market indicators, such as the exchange rate gap, continue to improve.
However, the official warned: “The path to stability is never an easy path and requires firm policy implementation” and that “it is important to continue to improve the quality of fiscal adjustment while adapting monetary policy during this period of transition”.
Kozack also underlined that he “welcomes the authorities’ recent efforts to increase social assistance with the aid program dedicated to children and also in pension fund programs.” “We must continue to accumulate social and economic support in a pragmatic way in order to push forward with reforms,” she said.
Minister Caputo, together with the President of the Central Bank Santiago Bausili, and part of his team will soon come to Washington to attend the Spring Assembly of the IMF and the World Bank, which will be held from the 15th to the 20th, an event where all the ministers arrive of Economy and Heads of Centrals from all over the world.
But Argentines have a mission that goes beyond listening to global ups and downs. They will certainly meet in parallel with the agency’s technicians and authorities to continue advancing in the next review of the program, the eighth, which according to the calendar should take place in mid-May and in which the IMF should disburse 792 million dollars. The economic team is also trying to negotiate a new deal to take new money from the organization (about $15 billion) to get out of the trap, a relief the Fund has so far given no indication it will grant.
Regarding the possibility of a new program, Kozack noted Thursday that “the Fund team and the Argentine authorities are actively discussing the Fund’s current support program, the objective of which continues to be to support measures to return to macroeconomic stability and establish the foundations for an inclusive approach”. and sustainable growth in Argentina. “At this time it is too premature to start talking about the modalities of a future program.”
The reserve accumulation and fiscal deficit targets were achieved, as Kozack pointed out. Last week, the IMF’s Western Hemisphere director, Rodrigo Valdés, traveled to Buenos Aires, where he met with Caputo, Bausili and other officials. The Chilean called for exchange controls to be appropriately “calibrated” and, as always, to support those most vulnerable to the adjustment.
Source: Clarin
