IMF hailed the plan's march but warned by inflationary inertia

These are funds that the government looks forward to after another day of rising dollar, contrary to what happened with the other currencies of emerging countries.

The Board of Directors of the International Monetary Fund (IMF) has cleared the disbursement after badyzing the data corresponding to the third review of Argentina's economic development as part of the program. confirmation agreement.

With this recovery of approximately $ 10.8 billion, total purchases since June 2018 amounted to SDR 28,013.71 million, or approximately $ 38.9 billion.

At the end of the meeting, Christine Lagarde, Executive Director and Chairman of the Board, said that "the policies of the authorities supporting the IMF-supported agreement are bearing fruit."

In this context, the head of the agency said: "The high budget deficit and the current account – two major vulnerabilities that led to the financial crisis last year – are dwindling. Economic activity has contracted in 2018, but there are signs that the recession is at its lowest and a gradual recovery is expected in the coming quarters. "

The policies of the authorities that support the agreement supported by the IMF are bearing fruit "(Christine Lagarde)

These compliments, however, have not prevented Lagarde from noting that inflation remains high "and that" inflationary expectations are rising and inflationary inertia is hard to break. "

In addition, the head of the multilateral organization said the local authorities were demonstrating "their determination to ensure that the public debt-to-GDP ratio is sustainable, thus reducing the 2018 primary deficit below the current level." objective set in the program. "

But there is still a but, "in light of a lower than expected level of tax revenues in the first half, it will be essential to act cautiously and cautiously in program execution. spending and other measures to increase tax revenues so that the fiscal situation of 2019 reaches the primary balance. " In other words, the government is adjusting spending more or increasing revenues. This is underlined by stating that "it is necessary to redouble efforts to improve the medium-term budgetary framework and debt management".

recalibrate

The IMF admits that after a few months of relative stability, "financial instability has rebounded in recent weeks, as the global financial situation has become less favorable and the results in terms of inflation disappointing".

In this sense, he recovers that the Central Bank reacted "Recalibrate monetary policy by maintaining zero growth of the monetary base until the end of the year". It also saves that a new charter of the BCRA was sent to Parliament since, in its judgment, if it is approved as law, enhance the credibility of monetary policy.

Although he does not explicitly mention the increase in poverty, he indicates that "Protecting the most vulnerable from the impact of the recession and high inflation remains a key priority." Indicates that the government has acted "improve the coverage of the social protection network and provide more resources to the poor ".

But he warns that it is "necessary to continue work to fill the remaining gaps in coverage of the social protection network and improve the effectiveness of social programs to combat poverty".

In another order, he believes that "favorable market conditions have allowed the government to fully refinance the debt that will expire in the coming months." According to him, the interest rate paid for this debt has decreased and the authorities are redoubling their efforts to extend the maturity of the debt recently issued. "

It notes that the authorities also apply policies aimed at developing debt markets in national currency. Finally, it refers to the need for "supply-side" reforms as it considers them "essential for achieving vigorous, sustainable and equitable growth and for improving the standard of living of the population". Argentina".

In this sense, it insists that "further efforts be made to create a less distortive tax system, promote greater competition in domestic product markets, remove barriers to international trade and investment, strengthen governance and fight against corruption "ah and by the way" promote gender equity ".

Finally, he claims that "the success of the authorities' political plans depends on continued and resolute implementation", but believes that it is necessary to "build broad support for policies that mitigate vulnerabilities economic growth, increase Argentina's growth potential and promote market confidence. "

It should be recalled that the technical mission chaired by the Italian economist Roberto Cardarelli was in Buenos Aires and gathered information not only from the official authorities, but also from members of the opposition, trade union representatives and representatives of the country. # 39; businessmen.