IMF and Argentina are “totally committed” to a new economic program; more negotiations to go

The International Monetary Fund (IMF) and Argentina are “fully committed“To achieve a new program, the lender said on Friday, although more talks are needed following recent technical meetings between the two sides in Washington.

The southern country is seeking a new agreement with the IMF to face the payment of US $ 45,000 million that it owes to the organization, after years of a deep economic crisis that plunged 40% of the population into poverty.

“There was a general understanding of the need to gradually and sustainably improve public finances, while giving rise to much-needed investments in infrastructure, technology and targeted social spending.“Said the IMF through a statement.

The Argentine economy will recover in 2021 from the collapse it suffered last year by the coronavirus pandemic, but it still carries years of decline, a severe fiscal deficit and inflation close to 50% per year.

“Addressing persistent and high inflation requires a multiple approach that implies a reduction in the monetary financing of the fiscal deficit, an adequate monetary policy with positive real interest rates and a coordination of prices and wages.”, Highlighted the multilateral organization.

“While further discussion will be necessary, the IMF team and the Argentine authorities remain fully committed to their joint work on a framework and policies for an IMF-supported program.”He added.

The IMF’s statements were well received by the Argentine government, which needs to improve economic indicators if it is to have a chance in the 2023 general elections after suffering a painful defeat in the mid-term elections.

“We are working on the same line. They recognize a number of advances in the economic reactivation in Argentina, the fiscal improvement that exists at this time“Argentine government spokeswoman Gabriela Cerruti told reporters.

The spokeswoman considered “very good, very positive”The communication from the IMF.

Argentine markets received the news with optimism and their decline was reduced on Friday before the close.