The managing director of the International Monetary Fund (IMF), Christine Lagarde, admitted Wednesday that her organisation had "underestimated" the "incredibly complicated" economic situation in Argentina.
The Fund agreed a US$56-billion stand-by agreement last year with President Mauricio Macri administration, after Argentina was gripped by a severe currency crisis.
"It was an incredibly complicated economic situation that many actors – including us – underestimated a bit when we started trying to help and put together – together with the Argentine authorities – a programme to deal with the most critical [sectors] of the economy," Lagarde said at an event in Washington.
She also noted that the improvement of Argentina's runaway inflation rate was taking "longer than expected." Prices, which have risen by 55.8 percent in the last 12 months, have increased by 15.6 percent in the first quarter of 2019 alone.
Inflation "is starting to fall, but it's taking longer than we had expected," Lagarde declared.
According to data published in mid-May by the INDEC national statistics bureau, inflation in April reached 3.4 percent marking the first deceleration of the year and raising hopes the government is beginning to tackle the issue.
Lagarde said she was "hopeful" that the IMF and the government's programme would be "successful."
The IMF chief also referred to the country's looming presidential elections in October, in which President Macri will seek re-election.
"There are political events that will come into play," she said. "But from an economic point of view, there was a very tough legacy inherited from the previous team, [which is] a difficult situation to manage from all angles," said Lagarde.
Argentina went into recession in 2018, after two exchange rate crises prompted the government to seek the IMF's assistance. In return for its multi-billion-dollar loan, Argentina committed to achieving fiscal balance in 2019 and banking a surplus in 2020, dedicating itself to a tough adjustment plan of austerity measures.