Monday, July 15, 2024

ECONOMY | 12-09-2022 22:03

IMF chief praises Massa's 'stabilising plan,' talks over review continue

Argentina and the IMF to continue talks over latest disbursement of funds, says multilateral lender’s chief after high-level talks with Sergio Massa.

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, hailed the “positive meeting” she held with Argentina’s Economy Minister Sergio Massa on Monday, while praising the steps Argentina’s new economy minister has taken to “stabilise” markets.

In addition, she confirmed that talks over the latest disbursement of funds from the nation’s US$44.5-billion credit programme would continue “in the coming days.”

"Our teams will continue virtual meetings this week" in search of an agreement "in the coming days," Georgieva said in a statement.

At a press conference after the meeting, Massa said that all the documentation from the latest quarterly review of the programme would be sent to the IMF’s Executive Board, which must approve the technical negotiations, by Friday.

Georgieva described the much-anticipated talks with the minister as "very positive,” noting that it came after a week of "productive and highly professional meetings" between the "technical teams" from both sides.

The IMF chief went on to praise "the strong steps" taken by Massa since he took office in July, which she said had helped to "stabilise the markets and reverse a scenario of high volatility."

According to Georgieva, the minister "expressed his clear intention" to improve the economy "under the principles of fiscal order and the strengthening of reserves."

She added: “The minister expressed his clear intention to mobilise external support, intensify efforts to stabilise the economy, and secure sustainable and inclusive growth.”

Litmus test

The trip to Washington was Massa's first major litmus test as economy minister, as he tries to reassure markets and the IMF of Argentina’s commitment to its US$44.5-billion Extended Fund Facility programme.

Under the terms of the deal, President Alberto Fernández's government must increase the international reserves of the Central Bank and reduce Argentina’s fiscal deficit from three percent of gross domestic product in 2021 to 2.5 percent this year, 1.9 percent in 2023 and 0.9 percent in 2024.

Georgieva on Monday insisted that the goals of Argentina’s programme "will remain unchanged," while noting that "conclusive progress" had been made on fiscal parameters, monetary policy and reserve accumulation. She also praised the nation’s efforts to combat tax evasion and money-laundering.

Massa leaves Washington satisfied, but said in his own press conference that much remains to be done.

"We have an economy that has generated employment over the last two years, that has been consolidating growth but also has challenges and problems to solve," such as high inflation, he said.

Argentina currently has one of the highest inflation rates in the world. Prices increased by 46.2 percent from January to July and analysts are now projecting an inflation rate of 90 percent for the calendar year. Around 37 percent of the population currently lives in poverty. 


Massa meets US Treasury chief

The IMF meeting was preceded by another at the US Treasury Department, at which Massa met Treasury Secretary Janet Yellen, a rather unusual occurrence.

After a marathon week of meetings, the minister does not return to Argentina empty-handed: Massa managed to secure multi-billion-dollar commitments from a host of international organisations, including US$5 billion from the Inter-American Development Bank (IDB) in 2022 and 2023, as well as another US$900 million from the World Bank.

A number of business leaders, from various sectors, also made commitments to invest in Argentina.



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