The International Monetary Fund issued a rare public rebuke to Economy Minister Serigo Massa on Thursday, declaring that his new electioneering measures to bolster the purchasing-power of suffering Argentines would only add to the challenges facing the crisis-stricken nation.
With less than a month to go before the October 22 presidential elections, the IMF is concerned that "the economic situation remains very difficult and complex" in Argentina, said Julie Kozack, the multilateral lender’s communications chief during a press conference in Washington.
“The recently adopted policy measures and announcements add to Argentina’s challenges,” said Kozack. "The latest reviews were aimed at restoring fiscal order and improving the economic situation. We are working to thoroughly evaluate the new provisions and take action to safeguard the programme's objectives.
In line with this, she assured that Argentina’s US$44.5-billion debt programme "is not broken" and that the IMF's objective "continues to be to help Argentina during this difficult time" and to work "in the search for consensus" in the midst of an electoral process that has many tensions.
"It is too early to speculate on when there will be a new programme review with Argentina," Kozack said.
"Inflation is high, very high and rising. Reserve [monetary] buffers are low and social conditions are fragile," warned the IMF official.
With inflation running at more than 124 percent per annum and four out of every 10 citizens now living below the poverty line, Massa has unveiled a massive scheme of cash handouts to deal with falling purchasing-power.
The measures – dubbed ‘plan platita’ by critics – include subsidies and tax exemptions for the poorest sectors and pensioners.
"We are working to better understand and assess the impact of recent measures and the need for compensatory actions that could be taken to reinforce stability and safeguard programme objectives without adding to future vulnerabilities," said Kozack.
The Fund also warns that one of Milei's flagship proposals, dollarising the economy, "requires important preparatory steps and is not a substitute for sound macroeconomic policies.”
While acknowledging that "determining an exchange rate is the prerogative of a sovereign nation," the IMF official it was important to ensure that "macroeconomic policies are consistent with an orderly transition" and "long-term viability of the system" that is chosen.