One of Massa’s last meetings with Georgieva, from the IMF / archive
In the International Monetary Fund, although the announcement has yet to be made official due to technical details, there is talk of a reduction of US$ 3,600 million in the reserve goal as of March 31 and 2,000 million for the whole of this year, according to sources from the Economy . Meanwhile, from the ministry headed by Sergio Massa they would go out to look for some US$ 10 billion through the soybean 3 dollar and loans that come from international organizations.
As reported yesterday, the IMF’s executive board gave the green light on Friday for the fourth review of the program with Argentina and for a disbursement of US$5.4 billion. A day later, he issued a statement warning the government that “stronger policies are needed to safeguard the stability of the program,” along with other warnings.
The agency said that the goals until December 2022 had been met and as a consequence the disbursement was made. But due to the drought – the crisis that the government argued – it agreed to lower the reserve goal, without saying how much.
According to the original program signed last year, the Government should have some US$7.8 billion in the Central’s coffers by the end of March; in June 11,000 and at the end of 2023 about 12,125, impossible to meet because it is estimated that the losses due to the drought will be between US$15,000 and US$20,000 million or more, according to calculations from Economy.
The IMF considered it “essential” to meet the fiscal deficit target of 1.9% of GDP for this year in order to deal with high inflation. This is how the Fund’s Executive Board positioned itself on Saturday after it approved a disbursement of 5.4 billion dollars for Argentina on Friday, bringing the total disbursements to 28.9 billion dollars.
The deputy managing director of the IMF, Gita Gopinath, said in a statement that the economic situation in Argentina has “become more challenging” so far this year due to the drought that the country is suffering and considered that, given the “magnitude of the shock climate change” some downward “adjustments” are justified in the reserve accumulation targets.
However, he considered that “a stronger policy package will be necessary to safeguard stability and maintain the anchor role of the program.”
Likewise, Gopinath affirmed that reaching the fiscal deficit target of 1.9% of GDP for this year continues to be “essential” in order to deal with some of the economic problems Argentina faces, such as high inflation, which is 102.5%, the highest since 1991.
The IMF traditionally accompanies the decisions of its Executive Board, like the one taken on Friday, with an explanation like the one Gopinath gave this Saturday.
However, unlike other occasions when all the information is made public at the same time, this time the process took place in two phases: a first phase with a few brief paragraphs on Friday where the disbursement of the 5,400 million was reported and a second phase with Gopinath’s statements.
The IMF’s decision comes after Gopinath met in Washington with the Argentine Economy Minister, Sergio Massa, while the president, Alberto Fernández, asked the US for support in a meeting with his counterpart Joe Biden.
