In the same vein, Massa replied that he was going to compensate her by giving her “An Argentine Malbec wine, which is less acidic than the Chilean one”in reference to the director of the Western hemisphere of the organization, Rodrigo Valdesborn in the trans-Andean country and recognized for its orthodox positions, also present at the meeting and who celebrated the occurrence.
Beyond the jokes, Georgieva had words of praise for the Argentine economic team, for its professionalism in the negotiations, according to what they say in Washington.
Also participating in the meeting were Leonardo Macdur, Marco Lavagna, Santiago García Vázquez and, on behalf of the IMF, Luis Cubedu and Julie Kozack.
In the meeting between the head of the IMF and the Minister of Economy, the question of multiple exchange rates was addressed, as it could not be otherwise. There was agreement on the need to go for a simplification, but not at this time amid electoral uncertainty and shortage of reserves.
Speaking of electoral issues, it is said that “The conversations with the representatives of Javier Milei were more collaborative” than those they had with the economists from Together for Change.
Massa defended his differential exchange rate scheme for agricultural products that allowed him, he maintained, to rebuild 1.8 billion dollars in reserves and reverse the previous deficit situation.
The evaluations of the Ministry of Economy show that, once the drought has been overcome and with the commissioning of the Néstor Kirchner gas pipeline, next year the country will have a large trade surplus. It should be noted in this regard that the IMF initially underestimated the effects of the drought in the country. In order not to be wrong again, it was learned that he has contracted a specific study on the prospects of the Argentine harvest.
Unlike its predecessor, Martin Guzman, Massa at no time raised the issue of overcharges paid by Argentina for credits. An important piece of information, which is discussed in the Palacio de Hacienda, is that the salary of the agency’s directors (between 14,000 and 16,000 dollars) is covered precisely by these surcharges. By the way, the Fund is currently discussing the possibility of an increase in directors’ remuneration, which Argentina opposes.
Package
In the communiqué released this Wednesday afternoon by the IMF, and which unlocked the disbursement of 7,500 million dollars, it is pointed out that agreed goals were not met for the second semester of the year and that A new package of measures was agreed to strengthen reserves and strengthen fiscal order.
The turnaround materialized after Argentina fulfilled different requirements (prior actions) demanded by the Fund, such as the 22% correction in the official exchange rate.
Although the agreement with the IMF contemplates an imbalance of 0.9% of GDP for next year, the minister Sergio Massa announced that he will propose to Parliament to reach zero deficit. In this regard, he maintained that he will do so “on the basis of the proposal that Congress Cut business profits that are in the offprint that last year they did not want to deal with. And tell me what are the business benefits that they cut.”
These benefits represent 4.5 points of GDPaccording to official calculations and the official intention is that at least one point is cut in 2024.
“Argentina is going to be an autonomous country the day this condition that represents the agreement with the IMF is removed”Massa maintained.
Drought
In the statement, the Fund notes that “since the completion of the fourth review (first quarter of the year), the main objectives of the program have not been achieved, as a consequence of the unprecedented drought and policy deviations”.
In this regard, it states that “In a context of high inflation and increasing pressures on the balance of payment, A new package of measures was agreed focused on strengthening reserves and reinforcing fiscal order”.
The Fund emphasizes that “the continuous and firm implementation of these measures will be essential in the coming period to safeguard stability and strengthen sustainability in the medium term.”
For their part, sources from the Ministry of Economy stated that “The social investment will be maintained, which was already agreed upon from the beginning of the program” subscribed with the Fund.
The Board’s decision allows for an immediate disbursement of about US$7.5 billion (5.5 billion SDRs), bringing total disbursements under the agreement to about US$36 billion. The next review is scheduled for November 2023.
The agency’s directors considered that the key objectives of the program were not reached until the end of June 2023 “due to the unprecedented drought and deviations from the policies”, requiring the approval of default waivers.
In addition, the Board of Directors approved waivers associated with the introduction of temporary measures that resulted in the introduction or intensification of foreign exchange restrictions and multiple currency practices.
It should be noted that, on repeated occasions, the Minister of Economy, Sergio Massadefended the intervention policy of the Central Bank in the exchange market to ensure stability in this market.
Modifications to the reserve accumulation objective were also approved, as well as the objectives of the primary fiscal balance and monetary financing of the deficit, “along with the commitment to apply a new package of policies to correct setbacks in economic policies, safeguard stability and achieve the objectives of the program.
The Fund’s statement does not contain any further details. The full report from the technical staff on Argentina is expected to be published this Friday.
The IMF credit was agreed during the administration of the president Mauricio Macri and later reformulated in a credit of facilities extended by some 44,000 million dollars, or around 1000 percent of the quota of the country in the organism.
After the press conference to close the trip to Washington, Massa will leave for Paraguay where this Thursday he will hold a meeting with the new president of that country, santiago pena. Meanwhile, in the afternoon, back to Argentina, he will participate at 4:30 p.m. Council of the Americas from the headquarters of the Argentine Chamber of Commerce. In it, the other presidential candidates will also speak, javier milei and Patricia Bullrich.
Source: Ambito
