The director of the Western department of the International Monetary Fund (IMF), Ilan Goldfjan, spoke at a press conference about the agreement reached between the organization and Argentina for the refinancing of the debt contracted by Mauricio Macri. He said that the important thing is the “implementation of the program” and he assured that “the goals are not going to change”.
Goldfjan pointed out that “the fiscal goals, of reserves, will not be modified, because they are the objectives of the program” agreed with Argentina, along the same lines expressed last week by the Minister of the Economy, Martín Guzmán.
“In Argentina today the name of the game is implementation”he remarked, just as his boss, Kristalina Georgieva, did in the last conference when he referred to Argentina.
“Reviews are normal in all programs. We are prioritizing measures so that the goals are met“, he added and admitted that in the framework of the war in Ukraine and the situation of international prices, the assumptions of that understanding could change, such as regarding inflation. He stated that possible changes in these points will be considered in the framework of the first review.
In the agreement that the Monetary Fund closed with Argentina, an inflation range of between 38% and 48% was established for 2022, but it is estimated that the price rise will be greater.
“As in many other countries, Argentina was affected by the global inflationary shock. The entire region is facing high inflation and this is also the case in Argentina. The review will usually take into account the new reality in all countries,” he said. Goldfajn.
“Prioritize the poor and protect the most vulnerable”
The Fund warned of the risks of inflation in the region, after exposing the economic projections for Latin America, which were presented last week with the World Economic Outlook (WEO).
Goldfjan emphasized that “the important thing is to prioritize the poor and protect the most vulnerable”since the price and high cost of energy derived from the war, “is temporary, as it was in the pandemic.”
Growth in Latin America
In a paper published today on the Fund Blog prepared by Goldfajn, Santiago Acosta-Ormaechea, chief economist; and Jorge Roldós, deputy director, warned that “the war in Ukraine, the increase in inflation, the most restrictive financial conditions, the economic slowdown of the main trading partners and social unrest can worsen growth prospects” in Latin America .
“Last year’s growth was 6.8% in the region but we don’t expect this to happen again, growth is slowing down”
Goldfajn indicated during the press conference, along the same lines as the text’s warning about “unusually high risks” for the region.
Latin America and the Caribbean are expected to grow 2.5% this year, far from the 6.8% registered in 2021. In this sense, he confirmed that Argentina is expected to grow 4% this year; for Brazil it projects an increase of 0.8%; for Chile it is 1.5% while for Mexico a growth of 2% is estimated among the largest economies in the region.