The Fund supported Batakis’ initial efforts to reduce the deficit

Silvina Batakis made her debut yesterday in Washington as Economy Minister with meetings Treasury key and a meeting with the CEO of the Monetary Fund International, Kristalina Georgieva, who said she held a meeting “productive” and highlighted the “first efforts” of the Argentine official to lower the fiscal deficit.

Batakis met this Monday in Washington with the head of the Fund at the agency’s headquarters, where she arrived accompanied by her deputy Karina Angeletti, ambassador Jorge Argüello and the head of the foreign ministry at the embassy, ​​Adrián Nador. Sergio Chodos, Argentine representative in front of the Fund, stayed in Buenos Aires.

“Another productive meeting with minister @sbatakis,” Georgieva tweeted after the meeting. “We welcome your initial efforts to strengthen fiscal sustainability and we agree on the importance of firm implementation of the program a face the economic and social challenges of Argentina ”.

From Economics they succinctly said that the Fund authorities “They have shown their interest in getting to know Argentina’s macroeconomic situation firsthandin the midst of the current global context resulting from the war in Ukraine and exchanging views on Argentina’s economic and social challenges ”.

The meeting between the two took place after Batakis visit Advisor to the Secretary of the Treasury, David Liptonand other senior officials from that department such as Michael Kaplan and Andy Baukol.

At the Treasury they wanted to know how Argentina intends to achieve the objectives of the program with the Fund and the challenges of the Argentine economy, when the dollar and inflation go up, public spending does not go down and reserves are depleted.

The minister tried to explain to them that the government is committed to achieving the general objectives according to, but that some flexibility is needed due to the international context. Although the world scene is upset by the war in Ukraine, no one is unaware of the intrinsic peculiarities of the Argentine crisis.

Lipton listened to Batakis’ arguments, but surely with a certain diffidence. He knows the Argentine case closely as it was Christine Lagarde’s second when the Fund granted our country the largest loan in history, in 2018, which then sank and ended up being renegotiated by Minister Martín Guzmán.

Batakis then met Georgieva, first face-to-face at the Fund’s headquarters and then had a working lunch with the Western Hemisphere Department Director, Ilan Goldfajn, his deputy Julie Kozack and the head of mission for Argentina. , Luis Cubeddu to see the details of the implementation of the program that the IMF wants to see completed as agreed.

The program foresees a reduction in the budget deficit up to 2.5% of GDP in 2022, a contraction of monetary assistance to the Treasury to 1% of GDP and an increase in net international reserves of $ 5.8 billion this year.

In her tweet, Georgieva highlighted the minister’s “first efforts” to contain the deficit, something that many experts question, at a time of low income, wage pressures due to inflation and the economic crisis.

The low expectation that the agreement’s objectives will be met, among other reasons, fueled the financial turmoil in Buenos Aires as the government awaited the results of Batakis’ talks with IMF officials to act.

After Batakis took office, Georgieva said the IMF remained committed to the recovery of the Argentine economy, but he stressed that the environment for the implementation of the program was “very challenging”. He then said that “painful actions” would be needed to achieve the goals.

Batakis immediately took care to point out that he would continue with the program and that the objectives set therein would be achieved and, above all, he stressed that the budget adjustment committed with the IMF would take place, while specifying that the agreement would be underwent “some changes because the world is changing”.

But, beyond the war in Ukraine and the international context, the crisis in Argentina is getting worse. In the report that the coaching staff presented to the board in the last review, he had already warned of the risks “very pointed” and warned against a “very complex political, social and economic environment”.

Argentina also faces a serious credibility problem that exists in Washington and Wall Street with the government of Alberto Fernández, but above all with the vice president Cristina Kirchner and Kirchnerism itself, which refused the agreement with the Fund and seeks to expand public spending.