The International Monetary Fund’s top spokeswoman said Thursday that the staff are holding “constructive discussions” with Argentina over a new financing agreement, adding that further talks are needed before a deal is finalised.
Speaking at a press conference in Washington DC, IMF Spokesperson Julie Kozack said “constructive discussions” are ongoing with President Javier Milei’s government over a fresh accord, though she remained tight-lipped over when an agreement would be reached.
Kozack instead praised ‘the enormous progress made by Argentina in reducing inflation, stabilising the economy, returning to growth and reducing poverty.”
The comments come after a week of rumours in Buenos Aires that a new deal is imminent.
Brushing aside questions from reporters, Kozack recognised the "need for continued fiscal, monetary and exchange rate policies," as well as more structural reforms to improve growth.
“I know you have a lot of interest, and there were many detailed questions here, but given that discussions are continuing and there has been good progress so far, we want to make sure that there is room for staff and the authorities to continue these constructive discussions,” she responded.
The aim of the new programme, Kozack said, will be to “build on the achievements so far, while addressing the remaining challenges.”
Argentina’s government is negotiating a new agreement with the IMF to replace its existing US$44.5-billion credit-line, granted in 2018 under former president Mauricio Macri’s administration.
It is also seeking an additional US$11 billion in fresh funding, which Milei says would allow the nation to eradicate the so-called ‘cepo,’ strict currency controls that limit access to foreign currency. Earlier this week, he set a 2026 deadline for their removal, adding that new cash from the IMF could speed up the process.
Economy Minister Luis Caputo said this week that a new IMF agreement would not imply a devaluation of the peso or an immediate exit from capital controls.
A timeframe for a new IMF programme has not yet been set, though earlier this year Fund technicians approved a recent assessment of Argentina's current programme, offering a favourable evaluation of recent economic measures.
Since taking office last December, Milei has reduced inflation from 211.4 percent in 2023 to 117.8 percent last year. He also recorded Argentina’s first fiscal surplus in more than a decade.
The flipside was the consolidation of a deep recession and an 11-point jump in the poverty index in the first half of 2024, with 52.9 percent of the population considered poor. The release of updated data is scheduled for March, though there are indications the situation improved in the second half of last year.
– TIMES/AFP/NA
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