Technical staff of the International Monetary Fund said in a statement this Tuesday. Support for the first measures taken by the Argentine Government to improve public finances. “These strong initial steps aim to significantly improve public finances and strengthen the exchange rate regime in a way that protects the most vulnerable in society,” IMF Communications Director Julie Kozack said in a statement. said.
Among the steps announced by the country’s new Minister of Economy Luis Caputo Strong correction in the official exchange rate from 400 pesos to 800 pesos per dollar and a sharp reduction in government spending with the aim of ensuring fiscal balance and nipping monetary emissions in the bud. “Its determined implementation will contribute to stabilizing the economy and laying the foundations for more sustainable growth led by the private sector,” the spokesman said in his message written in Spanish and English. he added.
Kozack emphasized that “IMF staff and new Argentine officials will work quickly in the coming period.”
The emergency package planned by the Administration of Javier Milei also includes the non-renewal of employment contracts of less than one year in the province, the suspension of official advertisements in the media, the reduction of the number of ministries and government secretariats, the minimization of transfers from the national state, no new public works tenders to the provinces. Caputo pointed out that these decisions were aimed at “defusing the crisis and stabilizing economic variables” in Argentina.
“Later Serious flaws in economic policy The IMF Director of Communications stated that this new package of measures in recent months provides a good basis for ongoing discussions aimed at reorienting the existing program supported by the Fund.
At the press conference he held last week, Kozack stated that high prices are one of the most important “imbalances” that the country must urgently solve and that “a strong and reliable central bank is needed to reduce inflation.”
An immediate challenge for Milei is to sit down and negotiate. IMF, an organization of which Argentina is a member have approximately 46 billion dollars. The new president is aware that the refinancing agreement signed with the IMF in 2022 has “collapsed” because Argentina failed to meet the fiscal targets for reserve accumulation and the ceiling on Treasury financing by the Central Bank set in this agreement. Compliance with these objectives is a condition of the Fund making quarterly payments that enable the country to pay its debts to the organization and avoid default.