The president of the Inter-American Development Bank (IDB), Ilan Goldfajn, revealed that the organization will provide Argentina with US$3.8 billion in credits, which will be distributed between the public and private sectors, over the next two years.
The financing will include an injection of US$2.4 billion for the public sector, which will be completed this year, and an expenditure of US$1.4 billion, over the next two years, for various private projects that will be developed in the country.
Goldfajn specified that financial assistance for the national administration will be used to improve spending efficiency, cover energy subsidies and social protection.
While the loans for the private sector will be directed to 20 projects related to agribusiness, infrastructure, energy and mining, among which are three initiatives linked to lithium.
The confirmation of the loans for the country was made by the head of the IDB in an article he wrote for the Financial Times, titled “The reforms are going to help Argentina free itself from its history”, in which he highlighted the progress of the Government in economic matters and highlighted the importance of joint work between the public and private sectors, foreseeing that it will allow better ground for the landing of investments.
In this regard, he maintained that to leave the country’s recurring crises behind, “a more efficient public sector and a dynamic private sector are required, which generates opportunities and serves as an engine of growth.”
In this framework, he appreciated that the Government “led by President Javier Milei, has been taking decisive steps in this direction: in just seven months it has made notable progress to restore the much-needed fiscal balance, going from a deficit of 2.9% of GDP at the end of 2023 to a surplus of 1.5% at the end of August this year.
Goldfajn considered that we should continue along this line and deepen the optimization of public spending, expressing that “it is of the greatest importance to continue improving the efficiency of spending and redirecting resources to better help the most vulnerable Argentines,” for which he provided a study of the organization in which it is stated that up to 7% of GDP can be reallocated and that inefficiencies in transfers and subsidies reach 3.3% of GDP.
In this regard, he assured that the IDB “is working closely with the Government to improve spending efficiency and reinforce social protection”, although that is only “part of the story” to improve the Argentine economy, since the objective The final goal is to generate job opportunities to achieve lasting and sustainable growth.
In his vision, a lasting transformation of Argentina depends on the interaction of a “courageous” private sector that takes advantage of opportunities to create jobs and drive growth, and a public sector that provides fine-tuned regulation and strong social protection, in order to create a cycle of stability and sustained growth.
On the other hand, he highlighted the work of the Executive in relation to deregulations in different sectors, indicating that “it is fine-tuning a long list of regulations and controls”, which, together with a favorable business climate, he considered will allow greater dynamism in the sector. private with investments.
Source: Ambito
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