Argentina's debt: Javier Milei speaks with the IMF
In Argentina, after sketching out the contours of his future government, the far-right president-elect, Javier Milei, must rectify the economic situation of the country plagued by very high inflation. That is why he met for the first time with the Managing Director of the International Monetary Fund. On the agenda of the discussion: the colossal loan contracted with the IMF.
Argentina: During his election campaign, Javier Milei brandished both a chainsaw, a symbol of the cuts he intends to make in public spending, and a hundred-dollar bill bearing his image, a symbol of the future dollarization of the country that he wants to carry out (here at a meeting on November 16 in Cordoba). AP - Nicolas Aguilera
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Argentine President-elect Javier Milei on Friday held his first meeting with International Monetary Fund (IMF) Managing Director Kristalina Georgieva, with whom he discussed the country's economic situation. "Today I had a great conversation" with Georgieva, online, "in which we talked about the great economic challenge that our country is facing," ultra-liberal Javier Milei said on X.
On the same social network, Georgieva said that the exchange had allowed them to address "the important challenges of the Argentine economy and the decisive political actions needed."
Latin America's third-largest economy is struggling to repay a colossal $44 billion loan from the IMF taken out in 2018 by then-President Mauricio Macri due to low foreign exchange reserves. For the past dozen years, double-digit inflation has been the norm in Argentina, but this year it has slipped to 143% year-on-year, a thirty-two-year high, with the currency, the peso, in constant depreciation.
Read alsoArgentina: the vicious circle of default again in sight
The outgoing administration of Peronist Alberto Fernández – who will step down as president on 10 December – has renegotiated the loan contracted with the IMF, but the recession that accompanied the Covid-19 pandemic and a severe drought this year have hit the Argentine economy, making it difficult to achieve the objectives set with the institution.
Read alsoArgentine President Fernandez unveils an agreement with the IMF on debt
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I spoke to her (Georgieva) about the different aspects of our fiscal adjustment plan and our monetary programme. The Fund has been cooperative in finding the structural solutions that Argentina needs," said Mr. Milei.
During his campaign, the far-right president-elect promised a drastic chainsaw-cut fiscal adjustment of up to the equivalent of 15% of Argentina's GDP, as part of a program that includes shutting down the central bank and dollarizing the country's economy. A programme that he reaffirmed on the evening of his electoral victory last weekend.
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The IMF is committed to supporting efforts to sustainably reduce inflation, improve public finances, and foster private sector-led growth," Georgieva said. The institution still has to pay $3.3 billion to Argentina before the end of the year as part of the aid plan.
(with agencies)
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