After approving the second technical review of the agreement with Argentina and meeting in New York with the president, Alberto Fernández, the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, anticipated that the credit program could undergo changes next year . In addition, she warned that inflation is the “most serious” problem facing the country.
In any case, both the Fund, through a statement, and its owner during a press conference at the Argentine consulate in Manhattan (where he met Fernández) praised the Government.
Before the meeting, Argentina and the IMF had announced the closing of the second review of the debt refinancing agreement. Something that, however, was subject to the approval of the Executive Board of the Fund, which is expected to meet in the coming weeks and approve the disbursement of some 3,900 million dollars.
In this regard, the IMF highlighted that “the recent and decisive” measures adopted by Argentina to correct “previous setbacks” are helping to restore confidence and strengthen macroeconomic stability.
In that sense, he considered that the “decisive” application of economic policies by Argentina “remains essential to consolidate macroeconomic stability and begin to address Argentina’s entrenched challenges, in particular high and persistent inflation.”
The director of the International Monetary Fund (@IMFNews), Kristalina Georgieva (@KGeorgieva), entered the Argentine Consulate to meet with President Alberto Fernández (@alferdez). pic.twitter.com/ohizTjAf7Z
– Pink House (@CasaRosada) September 19, 2022
It was also detailed that the technical staff of the IMF and the Government agreed that the objectives established in the approval of the agreement remain unchanged until 2023, including its two main ones: the reduction of the fiscal deficit to 2.5% of GDP in 2022 and a increase in net international reserves of 5.8 billion dollars this year.
But the goals of the program could be modified next year. This is how Georgieva advanced it during a brief talk with journalists after her meeting with the President: “We are facing a very high degree of uncertainty worldwide and that is also something to consider when we discuss the implementation of the program in Argentina. It was and continues to be very important to demonstrate a total commitment to the program and the implementation of the program”, he introduced and then warned: “As we better understand the performance of Argentina in the world economy in 2023, we must analyze the trajectory of growth, addressing inflation and eliminating subsidies that are detrimental to Argentina with an eye on integrating what may come”.
In that sense, he confirmed: “We will analyze the goals of the program, the progress achieved and what are the conditions for the implementation of the program to ensure that Argentina benefits as much as possible for the anchoring of its economy.”
Later, the head of the IMF stopped at what she considered “Argentina’s most serious challenge”: inflation. He added that “the focus is on dealing with the triggering factors of the deficit and the energy challenges” and insisted on the objective of implementing the agreement based on the necessary progress to “deal with inflation and achieve Argentina’s progress in terms of intensifying the economic process and meeting the expectations of the people”.
He also made it clear that this is a program of Argentina and not of the IMF: “As far as the Fund is concerned, what matters is whether we are putting the economy on a solid foundation for the people of Argentina. Does the Fund provide the necessary support, advice and commitment? Is the Argentine government promoting the implementation of its program? Because it is your program. We see with Minister Sergio Massa a demonstration that this is the case. The government owns the program. And the IMF staff is there to provide whatever support is necessary to move it forward.”
Georgieva, who this year met with three Argentine economy ministers (Martín Guzmán, Silvina Batakis and Sergio Massa) yesterday recognized the work of the former deputy, while describing his meeting with Fernández as “excellent”: “We welcome today’s agreement ( for yesterday) and we emphasize the importance of the decisive implementation of the program to combat inflation and strengthen stability for the sustainable and inclusive growth of Argentines”, wrote on her Twitter account the director of the Fund who had previously resorted to a tango analogy to illustrate the organization’s relationship with Argentina: “It’s like the tango, one step back and now two steps forward. This is how we want to dance this tango”.