It also notes that “the quantitative objectives of the program were met corresponding to the end of September, including international reserves and monetary financing of the fiscal deficit”.
Looking ahead, the statement also notes that “in a more challenging global environment and ongoing domestic risks, continued implementation of program policy going forward will be critical to achieving program objectives, entrenching stability, and ensuring sustained and sustainable growth. inclusive”.
waivers
The Board also approved waivers for the breach of performance criteria related to foreign exchange restrictions and the application of multiple exchange rates.
After the approval of the Board, the head of the IMF issued a statement in which she stated that “in response to the market disruptions of mid-2022, the new economic team of Argentina adopted corrective measures that are beginning to restore confidence and political credibility.
However, Georgieva argued that “prudent macroeconomic policies will be needed and a firm implementation of the program to address the still fragile situation, strengthen stability and meet the objectives of the authorities’ program supported by the Fund, which remains a key macroeconomic anchor”.
In particular, the managing director maintained that “achieving the primary fiscal deficit targets of 2.5% of GDP in 2022 and 1.9% of GDP in 2023 is essential for moderating import growth, building reserves and strengthening debt sustainability and further reducing reliance on central bank financing of the deficit”.
To achieve these objectives, he pointed out that “it is required tighten spending controls and greater efficiency in subsidies and social spending, which in turn would create space for critical energy infrastructure projects and targeted assistance to the most vulnerable.”
Giorgieva warned that “continuous and resolute implementation of the monetary policy framework is essential to sustain positive real interest rates and tackle persistently high inflation.”
Referring to the exchange rate situation, he stated that “specific exchange rate measures can temporarily support the balance of payments, they are not a substitute for sound macroeconomic policy.” And he added: “As such, exchange restrictions and multiple practices exchange rates should be dismantled as conditions and reserve coverage allow.”
props
She also demanded that “international partners meet funding commitments.” In this regard, Georgieva said that “it is essential to support the key objectives of the program.”
“The schedule of structural reforms it remains critical to addressing deep-seated economic challenges. Continued progress is needed to strengthen public financial managementto the Central Bank, as well as the frameworks to combat tax evasion and money laundering,” he added.
Similarly, he raised the need for strong regulatory frameworks and stable that can help boost Argentina’s export potential in key sectors, including energy.
Finally, he stressed that “broad political support for the policies of the program remains essential in the period ahead.”
Money
The approval enables the disbursement of some US$3.8 billion that would be received in the next few days. For the Treasury Palace, “The greatest political strength of the Government in terms of currency credibility and political credibility will be in the accumulation of reserves”.
Despite the favorable result given by the “soybean dollar” – the field liquidated almost 8,000 million dollars in September -, net reserve disposal remains limited (according to private calculations they are located somewhat above 5,000 million dollars).
It should be remembered that the IMF had already communicated to the Minister of the Economy, Sergio Massa, that the fulfillment of the reserve goals for the third quarter will be approved. In this way, although in the second quarter the Government had not reached this objective, since it is a cumulative figure, with the result of the third quarter the goal is achieved.
In what was interpreted as another show of support for Argentina, the Fund anticipated its evaluation of one of the most sensitive goals, which is the accumulation of reserves. Minister Massa was informed of this IMF decision last Wednesday when he was having lunch with the directors of the Argentine Chamber of Construction and, unable to hide his joy, shared the news with them. With this approval -the one of reserves-, one of the most difficult goals to meet, the disbursement at the end of the year is guaranteed.
As for the fiscal goal established for the third quarter, the Palacio de Hacienda is confident that “it will be fulfilled”, although the data, as usual, will end on the 20th of this month.
Source: Ambito
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