Friday, June 14, 2024

ECONOMY | 06-06-2024 15:37

IMF urges increased assistance for Argentina’s poorest

Fund’s chief spokeswoman Julie Kozack warns that Milei’s economic adjustment “should not fall disproportionately on working families.”

The International Monetary Fund (IMF) on Thursday called on President Javier Milei’s government to increase social welfare for those living in poverty and ensure his austerity programme does not fall “disproportionately on working families.”

The Fund’s chief spokesperson, Julie Kozack, said at a press conference that the multilateral lender is continuing to “monitor Argentina's delicate social situation.” 

“We have been emphasising the need to increase social assistance to support the poor and ensure that the burden of adjustment does not fall disproportionately on working families,” said Kozack as she responded to questioning over Milei’s economic policies.

President Milei assumed office last December vowing to halt the decline and to slash public spending. But new data released this week found that more than half of Argentines now live in poverty, with levels rising non-stop since a year ago and quickening under the new government.

All economic indicators are pointing to a crushing impact on the population of Milei's austerity measures, with falling employment and annual inflation exceeding 200 percent.

The IMF has been positive about the Milei government’s efforts to restore fiscal balance and slow inflation, but Kozack indicated Thursday that “additional calibration based on the evolution of social and poverty indicators” will be “necessary.”

The Fund official also underlined the importance of winning broad political support for Milei’s reform plans.

“As we have said many times in the past, it remains critical to work to broaden policy support for macroeconomic stabilisation and reform,” said Kozack.

The IMF spokesperson also said that the Milei administration should “give greater priority to micro-level reforms that can unlock barriers to entry that can promote formal employment in the country and attract private investment.”

When asked, the spokeswoman said that the IMF staff will meet ‘soon’ to discuss the approval of the latest audit of the country's economic programme, which would allow the disbursement of US$800 million.

"This agreement reflects strong ownership and decisive implementation by the authorities. All key programme targets were met by wide margins,’ the spokeswoman emphasised.

“The road ahead for Argentina remains challenging. Building on early achievements means that policies will have to evolve in areas we have already discussed,” she said.

Kozack revealed that the IMF executive board would meet “soon” to discuss the latest quarterly review of Argentina's US$44.5-billion credit programme with the multilateral lender.

Once the review is signed off by the IMF’s board, Argentina will receive some US$800 in funds to meet upcoming repayments.



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