IMF says Milei move to delay Argentina spending cuts is ‘pragmatic’

The International Monetary Fund said that Argentine President Javier Milei’s decision last week to water down spending cuts in his sweeping reform bill in an attempt to get it through Congress is “pragmatic,” and that the lender is satisfied with the impact it would have on the country’s US$44-billion loan programme.

Managing Director Kristalina Georgieva also said that the IMF and Argentina aren’t discussing a new loan, but that the new government has taken a welcome and “dramatically different approach” to policy making than former president Alberto Fernández.

“We have been backing up the Argentine people; we will continue to do so,” Georgieva said in a briefing with reporters in Washington on Thursday. “I’m impressed how open the president and government are to advice, good policy discussions.”

Milei, who took office in December, last week ditched the main austerity measures in his reform bill, but Economy Minister Luis Caputo implied that there will be deeper spending cuts in the future.

The IMF executive board on Wednesday approved a US$4.7-billion disbursement to Argentina. The loan was beset by uncertainty for months during the election campaign that saw Milei oust Fernández’s Peronist government.