IMF calls for labor flexibility | The recipe for …

"Uncertainty has eased and, more recently, inflation has started to decline as economic activity has picked up," said the director of the West Department of the International Monetary Fund, Alejandro Werner.
, celebrating the recent performance of the Argentine economy. The optimism displayed in a brief report on the prospects for Latin America
is conditioned to implementation of a set of structural reforms. The head of the multilateral agency reiterated his demand for the country to move forward with a set of structural reforms including, among others, "Relaxing the regulation of the labor market". The imperative of the IMF touches the whole region. Brazil is not only required to implement the transformation of the pension system
He recommends that you proceed with privatizations to develop again.

"The Argentine economy is gradually recovering from last year's recession," said Werner, recalling that the agency predicted a 1.3% decline in its revenue in 2019. Published estimates two weeks ago
they cut 0.1 percentage points from the calculations made in April. And, by 2020, the economy is expected to grow only 1.1% from the 2.2% expected in April. The director of the Fund believes that next year's recovery will be explained by "the rebound in agricultural production and the gradual restoration of consumer purchasing power, after a marked understanding of real wages and salaries". # 39; last year ".

The director of the IMF Department of the Western Hemisphere shares the diagnosis of the Palacio de Hacienda and the Central Bank on an inflationary slowdown. The last official measure recorded an increase of 2.7% in June and 55.8% in twelve months.
"Inflation should continue to fall. However, as inflation is more persistent, real interest rates should stay longer at higher levels, which explains the downward revision of growth in 2020, "said Werner, confirming the continuation of the drowning program. that threaten the recovery of consumption and the sustainability of SMEs.

Werner's recommendations for the region to cope with the "little momentum of growth" are two: budgetary adjustment and structural reforms
. Unlike other documents where the IMF has resorted to euphemisms, the agency manager demanded to go ahead with the flexibility of work. "Structural reforms remain imperative and need to be accelerated to stimulate potential growth. These reforms should include greater openness of economies to trade and foreign direct investment, and easing regulations on product and labor markets.
, promote competition and improve the quality of human and physical capital, "said Werner, listing the changes the Fund deems necessary for Latin American countries. The claims are consistent with the demands of the Mauricio Macri government for an alleged second term.

With regard to public spending, Werner's brief report states that "fiscal consolidation remains a priority in many countries in the region given the high level of public debt". The IMF economist acknowledges that "adjustment" is likely to slow growth, but the contractual effect can be mitigated by protecting public investment and well-targeted social spending, by increasing the collection revenue and reducing non-priority spending ".

The biggest demands are on Brazil, which for the moment is not subject to permanent surveillance by the IMF. "In addition to approving the pension reform, a continued reduction of the budget deficit in the coming years remains crucial to ensure the sustainability of the public debt," Werner said. However, the Fund goes further and suggests that "to stimulate potential growth, Brazil must pursue decisive structural reforms, such as in the area of ​​taxation, privatization, and liberalization of effective financial intermediation".