The IMF is satisfied with the plan of ultraliberal President Javier Milei because “it has allowed us to advance faster than expected in the reestablishment of macroeconomic stability and to firmly redirect the program,” it says in a statement.
What stands out above all is “the first quarterly fiscal surplus in 16 years, the rapid fall in inflation, the change in the trend of international reserves and a strong reduction in sovereign risk.”
A surplus achieved with thousands of layoffs and the deterioration of salaries and retirements in a country that is going through a strong economic recession, with inflation that is close to 290% year-on-year.
The international organization considers that the Argentine authorities “have made significant efforts to expand social assistance to vulnerable mothers and children, as well as protect the purchasing power of pensions.”
Protests have been taking place on the streets since Milei took office last December with a “chainsaw” plan to cut spending.
The Fund states that “an understanding was reached on policies to continue strengthening the disinflation process, rebuild international reserves, support the recovery and keep the program firmly on track.”
The agreement is subject to approval by the board of directors, which will meet in the coming weeks.
The amount of the disbursement is not specified, but an IMF spokesperson confirmed to AFP that it corresponds to what was planned in the program, that is, almost 800 million dollars.
“Better than expected”
The results are “better than expected” but “it is necessary that efforts continue to be made to improve the quality and equity of fiscal consolidation, refine the monetary and exchange rate policy frameworks, as well as address bottlenecks for growth,” estimates the financial organization.
The Fund’s experts and the team of Argentine Economy Minister Luis Caputo agreed on goals to advance the reforms.
The objective of reaching equilibrium without net financing from the central bank, reducing subsidies and strengthening spending control is maintained.
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