The IMF criticized the management of former Economy Minister Sergio Massa, explaining that “the program seriously deviated from its course” by failing to meet fiscal deficit goals.
The Government and the technical team of the International Monetary Fund (IMF) reached an agreement this Wednesday on the seventh review of the staff level agreement of the Extended Facilities Program of Argentina. Once the Executive Committee approves it, Argentina will have access to $4.7 billion in Special Drawing Rights (SDR).
In a statement, the IMF criticized the management of the former Minister of Economy, Sergio Massaexplaining that “the program seriously deviated from its course. The primary fiscal deficit and domestic debt targets for the end of September were missed, and preliminary data suggest that the year-end targets were missed by an even greater margin.” .
In this sense, the mission of the multilateral credit organization, headed by Luis Cubeddu and Ashvin Ahuja, said that “the new administration inherited a exceptionally challenging economic and social situation, with growing macroeconomic imbalances mainly reflecting inconsistent and expansionary policies, especially during the last quarters of last year. “Monthly inflation accelerated to 12.8 percent in November, reserves were depleted, the currency became even more overvalued and the exchange gap increased to historic highs.”
“Continued dependence on central bank financing and interventionist measures led to further deterioration of the central bank’s balance sheet and a commercial debt overhang of importers. Meanwhile, real wages fell further to multi-year lows and It is estimated that poverty levels exceeded 45 percent,” they warned in the text.
The organization also highlighted the “solid package of policies” carried out by the government that took office on December 10 and highlighted the “social and political support for the stabilization plan.” “President Javier Milei and his economic team acted quickly and decisively to develop and implement a strong policy package with the objective of restoring macroeconomic stability, demonstrating total determination to bring the current program back on the right course,” they indicated.
The IMF statement also stated that “as policies are implemented and credibility is rebuilt, “A gradual process of disinflation should begin, accompanied by an additional strengthening of reserves and an eventual recovery in production, demand and real wages.”
“The proposed disbursement is intended to support the strong political efforts of the new authorities to restore macroeconomic stability and help Argentina meet its balance of payments needs,” they held.
Source: Ambito
