The IMF supported Miley’s “ambitious” adjustment plan and released a disbursement of US$4.7 billion

The Executive Board of the International Monetary Fund approved this Wednesday a new review of the program with Argentina, the first under the government of Javier Meale, and with strong support the disbursement of US$4.7 billion. “ambitious” Libertarian Adjustment Plan with Measures “Bold” To reduce inflation and stabilize the economy.

IMF also approved “Extension of the agreement till December 31, 2024, The agreement originally expired in September and the measure will give the government more time to implement reforms.

The Board, made up of executive directors representing the organization’s member countries, spent several hours on January 10 analyzing the seventh review of the agreement at the technical level by a team of Fund officials led by Minister Luis Caputo and the Chief of Staff. Rodrigo Valdés and his second Luis Cubedú from the Western Hemisphere. The agreement managed to revive the extended facilities program that had been derailed the previous year with Sergio Massa’s “Plot Platita”, whose targets were not met.

this Wednesday The board gave its final approval And disbursements were made, although the entire amount did not reach the Central Bank because a good part was used to cancel maturities with the organization, amounting to about US$2,780 million between the capital and related interest maturing this Wednesday.

In a statement issued at the end of the session, the Managing Director Kristalina Georgieva Reviewed the failure of the previous program: “Following the completion of the latest reviews, Argentina’s major imbalances and distortions worsened, and the program diverged significantly, reflecting the inconsistent policies of the previous government.

And he added: “Amidst this difficult legacy – high and rising inflation, declining reserves and high levels of poverty –, The new administration is taking bold steps Restoring macroeconomic stability and beginning to overcome long-standing obstacles to growth. These early measures avoided a balance of payments crisis, although the path to stabilization would be difficult.

“An ambitious agreed stabilization plan focuses on establishing a strong fiscal support Ending all central bank financing of the government. Achieving a primary fiscal surplus of about 2% of GDP this year would be achieved through a combination of efforts to rationalize energy subsidies and transport, administrative costs and low-priority discretionary spending, as well as strengthening temporary import-related taxes and fuel taxes. Will be based on,” Georgieva said.

“Social assistance is also being strengthened to support the most vulnerable and protect the real value of pensions. for a longer time, High quality fiscal measures are expected to be adopted to achieve structural reforms in revenues and expenditure and ensure consolidation and more equitable distribution of burden.”

Georgieva referred to the dollar and reserves: “After the realignment of the exchange rate, exchange rate policy should continue to ensure reserve accumulation objectives. To overcome the problem of large commercial debt and to create a more efficient import system. Important measures are being taken. Transparent and rules-based. Moreover, the authorities Commit to ending exchange restrictions in the short term Develop a plan to gradually eliminate distortions and multiple exchange rate practices, and take capital flow management measures as conditions permit.

“The monetary policy stance should evolve to support money demand and deflation, while the monetary policy framework and operations will be adjusted to strengthen its leading role,” he said. Strengthening the central bank’s balance sheet will be a priority. Has been made.”

Georgieva highlighted efforts to “correct large and widespread relative price imbalances, reform the energy sector, and build a simple, rules-based and market-oriented economy.” and “provided a more predictable regulatory framework to promote investment and unleash Argentina’s energy and mining potential, while also addressing barriers to growth, formal employment and trade.”

Georgieva made a veiled reference to the fact that perhaps more reforms are needed than what is currently being debated in Congress and that political and social consensus is important to get the program going. ,Agile policy making and contingency planning will be necessary, and additional measures may be needed to ensure program objectives and restore lasting sustainability. “Clear communication and well-targeted social assistance remain essential, as well as sustained efforts to generate social and political support for the programme,” he warned.

Miley’s new plan is far more serious and shocking than that of Alberto Fernández’s government and more palatable to the fund’s board of directors, tired of Argentina’s non-compliance. With cuts at all levels, it contemplates a stronger fiscal adjustment and renews previous targets at a more “ambitious” level. The government is committed to achieving a primary fiscal surplus of 2% of GDP by the end of this year and accumulating US$10 billion in net reserves by the end of 2024.

In fact, this adjustment, the Fund predicted in an update to its Global Outlook report on Tuesday, would lead to a -2.8% recession in the country this year, although inflation would fall by as much as 150% annually by the end. 2024.

The news came with Chief of Staff Nicholas Posey in Washington, who met with the organization’s number two, Gita Gopinath, on Tuesday to give her the news about the omnibus legislation’s treatment in Congress and its impact on the program’s goals. Suspending tax laws as requested by the opposition. Caputo emphasizes that despite the government’s missteps with the law, the goals will still be achieved.

This mission of Posse was also in front of Treasury officials because the United States is the most important member of the board, as it is the largest economy on the planet.