“Excellent meeting with President Milei,” posted the head of the International Monetary Fund, Kristalina Georgieva. For his part, the president also summarized the meeting via social networks with this phrase: “We are doing very well…!!! LONG LIVE FUCKING FREEDOM.” “It was an excellent meeting, we continue to move forward, we are doing well” synthesized a source from the Argentine delegation Scope.
The conversations that the Fund’s technical teams have been carrying out with the economic authorities of Argentina are advanced and, in this context, Georgieva’s words are understood, who stated: “We would like to work quickly on a new program and bring it to our board”.
In this regard, Scope could know that they exist few points of disagreement regarding the characteristics of the new program and the mission visit – which is estimated to be chaired by Luis Cubeddu (head of the negotiation) – surely the purpose is to conclude the conversations.
There are differences over monetary policy. The IMF is already seeking Argentina to dismantle the stocks and unify exchange rates. On this point, the Argentine Government agrees, but the discussion revolves around the timing and the way to carry it out. There is also the debate about whether the current exchange rate is balanced, an aspect that the multilateral organization has been questioning.
The president is convinced of the program being carried out and is not willing to put it at risk. He believes that the results support it. This position clashes with the dogmatism of the Fund’s technical teams.
Milei stated this Sunday that “at the beginning of our administration, the exchange gap was 180%. Today, that gap is practically dead and “We work day and night to finish cleaning up the Central Bank’s balance sheet and be able to lift the exchange rate once and for all.” In a speech given at the Milken Center in Washington, he also maintained twice that the IMF was surprised by the results of its program.
Thus, the one who will help unblock the talks will be Kristalina Giorgieva, they speculate in Washington, since she is “much more pragmatics”.
In principle, the amount that the Argentine government would seek from the organization is around 11,000/12,000 million dollars and the economic team is evaluating complementing this figure with a new REPO operation.
New agreement
It is worth remembering that at the end of December it was officially announced that “the authorities have formally expressed their interest in moving to a new program and negotiations are underway,” as it was announced. Julie Kozack, spokesperson for the multilateral organization, in response to a consultation by Ámbitowithin the framework of a press conference held in Washington and then recalled that the SAF Extended Facilities program ended at the end of 2024.
On that occasion, Kozack explained that the Fund’s technical teams were working with the Argentine authorities.
In turn, the Minister of Economy, Luis Caputo indicated that he estimated that “for the first quarter” of this year “we will reach a new agreement.”
Also and regarding the exchange restrictions, he said that to lift them it will be necessary:
- Let inflation converge to the crawl level.
- The second will finish balancing the money market, the demand and supply of pesos.
- Finally, reach the agreement with the IMF. “If these three goals are met, we will probably be in a position to get out of the trap.”
Recovery
Just this past Friday, the IMF economist, Pierre-Olivier Gourinchas in response to a consultation from Ámbitoindicated that they expect a growth of 5% in GDP for the current year “driven by the increase in real wages, by the increase in bank credit and this will help stabilize the economy.”
Gourinchas, in line with the statements of the Fund’s top managers, was very complimentary of the policies implemented by Javier Milei’s government. He said that “we are seeing a significant change in the Argentine economy in 2025 compared to 2024.” The Government’s response consisted of implementing “very contractionary fiscal measures with a fiscal contraction of around 5% of GDP and that is one of the main drivers of the contraction in 2024.”
“What we are seeing now is that the economy, real GDP, is recovering.” He stated that “The economy has already begun to recover quite strongly. In fact, in the third quarter of the year, growth was already 4% quarter over quarter.”
He considered that “this is a very strong rebound and we project that this rebound will continue in 2025, it will be driven by the increase in real wages, the increase in bank credit and will help stabilize the Argentine economy.”
The economist maintained that they project a growth rate of 5% for both 2025 and 2026. In the previous report, from last October, the Fund already anticipated an increase of this magnitude in Argentine GDP for the current year. What changed is that the expected growth for 2026 also rose to 5%, three tenths of a point above the previous forecast.
Source: Ambito
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