The technical staff of International Monetary Fund This Tuesday he expressed his support for the initial measures taken by the Argentine Executive to improve public finances.
“These strong initial actions aim to significantly improve public finances in a way that protects the most vulnerable in society and to strengthen the exchange rate regime.“, indicated in a statement the Director of Communications of the IMF, Julie Kozack.
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Among the steps announced by the country’s new Minister of Economy, Luis Caputothere is a strong correction in the official exchange rate, which will go from 400 to 800 pesos per dollar, and a strong reduction in State spending with a view to achieving fiscal balance and cutting monetary issuance in the bud.
“Its decisive application will contribute to stabilizing the economy and laying the foundations for more sustainable growth led by the private sector.“added the spokesperson in her message written in Spanish and English.
Kozack emphasized that “the staff of the IMF and the new Argentine authorities will work quickly in the coming period”.
The emergency package planned by the Executive of Javier Milei It also contemplates not renewing labor contracts of less than one year in the State, suspending official advertising in the media, reducing the number of government ministries and secretariats, cutting transfers from the national State to the provinces to a minimum and not putting out to tender new works. public.
Caputo pointed out that these decisions are intended to “neutralize the crisis and stabilize economic variables” of Argentina.
“After the serious setbacks in economic policy in recent months, this new package of measures constitutes a good basis for continuing discussions aimed at redirecting the current program supported by the Fund“concluded the IMF Communications Director.
Kozack had stated last week in a press conference that high prices are one of the “imbalances” most important that the country must face urgently and that “A strong and credible central bank is required to reduce inflation”.
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An immediate challenge for Milei is to sit down to negotiate with the IMF, an organization to which Argentina owes some 46 billion dollars.
The new president understands that the refinancing agreement signed in 2022 with the IMF is “fallen“because Argentina has failed to meet the fiscal goals of reserve accumulation and the ceiling on Treasury financing by the central bankestablished in that pact.
Compliance with these objectives is a condition for the Fund to make quarterly disbursements that allow the country to pay its dues with the organization and not fall into default.
