Argentina demonstrates “impressive progress” in the economy, says IMF

The director of the IMF (International Monetary Fund) Communications Department, Julie Kozack, praised the “impressive progress” of the economic stabilization plan adopted by President Javier Milei in Argentina, which he characterized as “ambitious”.

Speaking to journalists on Thursday (April 4, 2024), Kozack said that, under Milei’s government, inflation is decreasing at a faster rate than expected by the financial institution. He highlighted, however, the importance of continuing to “improve the quality” fiscal adjustment and also adapt monetary policy during this transition.

“Progress so far has been impressive, with fiscal surpluses recorded in January and February for the first time in more than a decade, rebuilding of international reserves, a faster-than-expected fall in inflation and continued improvements in market indicators”declared Kozack.

The director emphasizes that Milei’s plan to recover economic stability prioritizes the creation of a solid fiscal base, eliminating any government financing from the Central Bank. Furthermore, the plan includes policies to reduce inflation, increase reserves and resolve issues such as “distortions and other long-term obstacles to growth”.

But in the Fund’s assessment, despite the progress observed, it is important to focus on building social and political support to ensure that reforms are lasting and effective.

“Our objective continues to be to support the authorities’ efforts to restore macroeconomic stability and lay the foundations for prosperous and inclusive growth in Argentina”, he stated. For the institution’s representative, inflation falling faster than expected is an indicator “very positive in that sense”.

According to data from Indec (National Institute of Statistics and Census), monthly inflation in Argentina closed February at 13.2%. It represents a slowdown compared to January, when it reached 20.6%.

Communications (24.7%), transport (21.6%) and housing, water, electricity, gas and other fuels (20.2%) were the sectors that had the highest monthly variation.