The IMF affirmed yesterday that the agreement closed with Argentina is “pragmatic and realistic” and trusted that it will be approved by the National Congress before March 22, the date on which a maturity of USD3.2 billion operates.
The staff that negotiated the new program with Argentina offered a virtual press conference headed by Ilan Goldfajn, Head of the Southern Hemisphere.
During the conversation, the IMF revealed that the reduction in energy subsidies will be of the order of 0.6% of GDP adjusted to a “progressive” criterion.
In turn, he specified that the path of fiscal reduction aims to obtain balance in public accounts in 2025, after the already known guidelines: 2.5% of GDP in 2022, 1.9% in 2023 and 0.3% in 2024.
Regarding the expected inflation goals, the IMF staff indicated that “they are working with a range” of between 38 and 48% for 2022 and then a reduction of five percentage points in the following years.
In that sense, he highlighted the value of monetary policy so that “it will generate positive interest rates” and a reduction in emissions to finance the fiscal deficit, which, according to IMF technicians, will help curb the inflationary process.
Goldfajn stressed that “it is a pragmatic and realistic agreement with credible economic policies to promote macroeconomic stability.”
The official pointed out that the program’s guidelines have already been submitted to the agency’s Board of Directors, which will deal with it once the program is approved by the Argentine Congress.
When consulted about the “exchange stock” the answer makes it clear that Argentina will continue with this scheme for a long time.
“Here we aim to find ways to improve the macroeconomy and loosen controls over time,” he said.
For his part, Luis Cubeddu Head of the Argentine mission reported that the IDB, the World Bank and CAF will participate in the agreement with a contribution of funds of 0.4% of GDP during the years that the program lasts.
The disbursement schedule will be informed once the agreement is approved by the Board of Directors headed by Kristalina Georgieva.
Source: Ambito
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