The International Monetary Fund’s (IMF) Managing Director Christine Lagarde arrived in Buenos Aires on Friday for a series of meetings with government officials surrounding the US$50 billion stand-by loan package it granted to Argentina in June.
Lagarde will also participate in the third summit of G20 Meeting of Finance Ministers and Central Bank Governors.
The IMF wants to see the Mauricio Macri administration implement an austerity programme to the tune of 300 billion pesos in spending cuts (US$10.7 billion), among other measures.
To date, the government has little to offer the IMF but good will. However, sources say officials will talk up Argentina’s 0.8 point deficit of Gross Domestic Product (GDP) in the first six months of the year. The government hopes to slash the primary deficit to 2.7 percent this year with an ambitious goal of 1.3 percent in 2019, as was agreed upon with the IMF. By 2020, it hopes to have achieved fiscal balance.
Lagarde’s visit comes just a day after President Macri gave a press conference at the Olivos presidential palace where he insisted Argentina was “not headed toward a crisis like those of the past”.
“This storm surprised us just as we were taking off”, Macri said, recognising that it had “not been as easy to manage inflation as we had first thought but it continues to be our utmost priority”. Among other major statements, he suggested his government was on track to shave 10 points off annual inflation in 2019.
On Tuesday, the INDEC statistics bureau reported June inflation as the highest rate of monthly inflation in two years at 3.7 percent.
Lagarde arrived to Argentina on Friday as unions, left-wing groups and human rights organisations rounded off the final details of a protest march planned for Saturday.
“The arrival of the IMF will open up infinite conflicts” with some sectors of society, said Juan Carlos Schmid, of one three CGT union confederation leaders.
“There will be no social consensus on the part of organised workers”, he warned.
“It’s unviable for a country that is paralysed and suffering this rate of inflation that an austerity programme be implemented”, he added.
Lagarde is joined in Argentina by the IMF’s First Deputy Managing Director David Lipton; Director of the Western Hemisphere, Alejandro Werner; and mission chief for Argentina, Roberto Cardarelli.
Her schedule includes a dinner at the Olivos president palace with President Macri, Cabinet Chief Marcos Peña, Treasurer Nicolás Dujovne and Central Bank Governor Luis Caputo.
Dujovne will meet with Lagarde to evaluate Argentina’s economic situation and its compliance with the goals set out in the stand-by loan agreement, government sources told Perfil.
The Treasurer and IMF chief will then hold a press conference on Saturday at 9.30am at the Buenos Aires Exhibition Centre (CEC), where the G20 summit will take place. It is believed Macri will offer closing remarks at the event, at around 4pm.