“The authorities are now exploring the option of moving to a new agreement” Kozack said in response to a question from Scope. The official added that “Argentine authorities have continued to implement their economic stabilization program and the program is yielding impressive results.”
These achievements include “a considerable reduction in inflation, the fiscal surplus and better coverage of reserves” in foreign currency. He added that “There are also signs of recovery in both economic activity and real wages.”
Regarding the new agreement, he stated that “IMF technical staff continue to work closely with the authorities and stand ready to support Argentina and its people to consolidate recent achievements and address remaining challenges.”
Asked about the restrictions that the Government imposes on exchange matters, Kozack said that “the stabilization program has given better results than expected to date and to maintain these impressive results in terms of stability and growth, it is necessary, of course, to continue adopting a coherent set of policies, including the fiscal, monetary and exchange areas.”
He concluded by pointing out that “Of course, our team and the (Argentine) authorities are participating very closely on these issues as they continue this very constructive dialogue.”
No problems
Precisely this Thursday the presidential spokesperson, Manuel Adornistated that “There will not be any type of difficulties in the agreement with the Fund“because, he considered “There are no reasons for the Fund not to support Argentina.”
He emphasized: “There will surely be a new agreement and we understand that the path is outlined and paved for that to happen as quickly as possible.”
As background, President Javier Milei met this Tuesday with the head of the IMF, Kristalina Georgieva, within the framework of the G20 meeting that took place in Rio de Janeiro, a meeting that they described as “excellent” in the environment of the first president.
In a post after the meeting with Milei, Georgieva said: “We took stock of the impressive progress made in stabilizing the economy and strengthening it in the market. We are willing to support Argentina and its people to continue advancing these achievements”.
“And, if you want to continue helping us “The only thing we need is to strengthen the reserves of the Central Bank”they usually say in official offices.
In particular, the meeting with Georgieva generated expectations given that the current agreement between the country and the IMF is close to ending and there are still two reviews of the multilateral organization.
Argentina has not yet formally requested to discuss a new agreement, but intense conversations are taking place with the team in charge of Luis Cubedduin charge of Argentina in the Fund.
Specialists point out that when the request for a new agreement is formalized, the pending reviews would be subsumed in these conversations. It should be noted that a new program with the IMF should include fresh funds, as official authorities have stated on more than one occasion.
The current economic situation allows Argentina to negotiate more firmly than on other occasions. The country shows fiscal balance, not only in numbers but also in the political will to strictly respect this premise.
In this sense, the deputy José Luis Espertreiterated last Tuesday, the thought of the ruling party by pointing out that “zero deficit is not negotiated, with zero deficit everything, without zero deficit nothing.”
These statements were supported by Milei himself. The political will to maintain fiscal balance usually weakens in an electoral scenario, but it is not the attitude of the ruling party: one of the central axes of Libertad Avanza is precisely to attack the causes that generate expenses from the State.
The tension on this point with the provinces is also understood by the fact that legislative elections will be held next year. In the first ten months of the year, current transfers to provinces fell 67.8% in real values according to data from the consulting firm ACM based on information from the Secretary of the Treasury.
Sources from the Casa Rosada point out that the governors are asking for an increase in spending in the order of 3.7 billion dollars without identifying where these resources will come from.
However, The Government remains firm in the premise of controlling spending since, beyond considering it key to the economic program, it is also part of its political strategy expressed through the fight against “caste.”
These factors, added to the decrease in country risk and the increase in local assets, will allow, according to specialists, Argentina to go out and place debt in the international market in the not too distant future.
It is within this framework that negotiations with the Fund are carried out where the organization’s technicians have little to reproach. The deviations refer to the goal of reserve accumulation and the issue of different exchange rates (precisely, restrictions due to the lack of foreign currency) and which is precisely what the organization could contribute to improving with fresh funds. Furthermore, one of the fundamental purposes of the Fund is to financially assist its partner countries in the face of external restriction.
Support from Donald Trump
Furthermore, the new president of the United States, donald trumpwas explicit in its support for Milei by inviting him days ago to the Conservative Political Action Convention (CPAC) that took place at the Mar – A- Lago Complex, in Florida.
This good harmony with the Argentine government reinforced by Elon Musk (He will be an official of the Republican administration in a department with deregulation tasks, similar to the one carried out Federico Sturzenegger in the country) gives rise to estimates that the IMF could grant Argentina a new loan.
Source: Ambito
