A spokesperson for the International Monetary Fund has admitted that the economic consequences of Russia's attack on Ukraine will likely impact upon the targets outlined in Argentina’s new financing programme.
The agreement between the IMF and President Alberto Fernández's government, which was ratified by Argentina’s Congress on Friday and is awaiting approval by the Fund's Executive Board, is intended to lower the country’s runaway inflation, which last year exceeded 50 percent.
"The programme seeks to begin to reduce persistent high inflation," said IMF spokesman Gerry Rice. "This, of course, will be a challenging task. In light of the evolving global conjuncture, as rising commodity prices are impacting inflation throughout the world."
Rice said Argentina is already feeling the economic impact of the Russian invasion of Ukraine, which was launched by Russian President Vladimir Putin on February 24.
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"Argentina, like other emerging economies, is already being affected by the war in Ukraine, including with the rise in global commodity prices already impacting inflation," she told a press conference.
"IMF staff [are] assessing the potential broader impact on growth, as well as on external and fiscal balances. Uncertainties, however, remain large, and depend on the duration of the conflict," Rice added.
Rice said the newly agreed programme features a "multi-pronged strategy" to lower inflation, which involves “a reduction of monetary financing of the fiscal deficit and a new framework for monetary policy implementation to deliver positive real interest rates to support peso asset demand."
Inflation in Argentina reached 50.9 percent in 2021; it totalled 36.1 percent in 2020, a year of economic paralysis due to the Covid-19 pandemic, and in 2019 it reached 53.8 percent.