The two parties confirmed that an agreement has been reached, which must be approved by the IMF Executive Board and implemented after the presentation of “new targets” at the end of January
In a joint statement, they highlighted that Argentina’s economic stabilization program “has gone seriously astray” and that the targets for the fiscal deficit “have not been met by an even greater margin”.
The IMF also recalled that “the objectives regarding net international reserves were not met, with deviations from the year-end objective of around 15 billion dollars (13.7 billion euros)”.
The multilateral organization said it supported “the strong political efforts of the new authorities to restore macroeconomic stability” and thus be able to help Argentina “meet its balance of payments needs”.
Ultraliberal economist Javier Milei won the November presidential elections and was sworn in as president of Argentina on December 10.
During the transition period, in December, Milei had to resort to a short-term loan from the Development Bank of Latin America of 960 million dollars (874 million euros) to pay the December 21st salary.
After confirming the agreement, the Minister of Economy, Luis Caputo, indicated, in a press conference, that the IMF would be open to the possibility of a new agreement.
However, he said that the executive believes that “it is time for the country to solve its financial problems by solving its underlying structural problems, which is its addiction to excessive public spending”.
Argentina faces serious macroeconomic imbalances, which include, in addition to the lack of external reserves, the fiscal deficit and very high inflation, whose December data will be known today[ontem]but which will probably close 2023 very close to 200%.
Milei, who defines himself as an “anarcho-capitalist” – a current within liberalism that aspires to eliminate the State – implemented a series of measures to deregulate the economy, which in recent decades has been marked by strong state interventionism.
Among the measures announced are a 50% devaluation of the Argentine peso, cuts in energy and transport subsidies and the closure of some ministries.