'Inflation tops the list' of Argentina's problem, says IMF chief Kristalina Georgieva

Inflation is the main problem afflicting Argentina's economy, International Monetary Fund (IMF) chief Kristalina Georgieva said Tuesday, a day after meeting with Economy Minister Sergio Massa.

"We are at a time when he [Massa] seriously recognises and, of course, I seriously recognise that the problems facing Argentina are very significant. And inflation tops the list," Georgieva said during a video conversation with the diirector of the Centre for Global Development (CGD), Masood Ahmed.

Argentina has one of the highest inflation rates in the world, with a cumulative rate running at 46.2 per cent from January to July. Analysts are projecting it could reach 90 percent by the end of the year.

"That is devastating, especially for the poor in Argentina, so [the challenge is] how to work together to address this problem that has accumulated over time," Georgieva said.

The IMF chief expressed hope over the immediate future, however, indicating that she had warmed to Massa and his approach.

"I came away [from the meeting with Massa] with the feeling that we have a partner we can work well with," she said.

The Fund's director had already described Monday's talks with Massa as "very positive." In a statement she praised "the strong steps" taken by Argentina to "stabilise markets and reverse a scenario of high volatility."

During his visit to Washington, Massa and an IMF technical team negotiated the next disbursement of the US$44.5-billion credit programme signed by Buenos Aires and the Washington-based organisation earlier this year. 

Talks between the two parties will continue this week. At a press conference in Washington, Massa estimated that by Friday documentation would be ready for transmission to the IMF's Executive Board, which has to sign-off on any release of funds.

Speaking ahead of the upcoming annual meetings of the IMF and the World Bank in Washington this week, Georgieva recognised that there is a "very strong commitment from Argentina to the programme, in recognition that the programme is an anchor for the Argentine economy."

"They don't have the luxury of other anchors," she concluded.

– TIMES/AFP