The IMF mission arrives: it revises the objectives to disburse an additional 10.7 billion dollars – 02/10/2019

A new mission from the International Monetary Fund will arrive Monday in Buenos Aires to review the progress of the economic plan, then submit a report to the Board of Directors to approve the disbursement of funds. USD 10.7 billion in March. The team, led by Italian coach Roberto Cardarelli, is appearing for a third review of the program. During this mission, experts will meet government and central bank officials, as well as businessmen, politicians, politicians and academics. "We will try to meet a wide range of sectors, with leaders, representatives of the private sector and civil society, and sometimes also with opposition leaders, "spokesman Gerry Rice said Thursday, during his last mission, Cardarelli met Sergio Mbada, who had criticized the agency's program and questioned its continuity if Peronism took office in 2020.

The last visit of the delegation of officials took place in early November, also chaired by Cardarelli, and its report had allowed the approval shortly before Christmas of the last disbursement of the agency. The Board of Directors then approved some $ 7.7 billion, part of a total of 57 000 million euros covering the entire loan.

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In this latest revision, Cardarelli had clearly expressed his support for the reforms implemented by the government, in particular the monetary policy frameworks set up by the Central Bank in October to stabilize the markets. The visit of the team of technicians will now run in a context of greater financial tranquility and with a stable exchange rate to the point that the Central Bank had to intervene in the purchase of dollars to support the currency. The budget deficit figures they also seem more controlled.

Clarion consulted, Claudio Loser, former director of the IMF for the Western Hemisphere, said that "the mission of the IMF can be considered routine within the framework of the program with the institution. should not be viewed with concern, beyond the country's fundamental problemsThe expert, now director of Centennial Group Latin America, added that "based on existing practices, the first thing the mission must badyze (and what it will do) is to study the achievement of quantitative goals. from the program. These are those related to the central government's fiscal and debt performance and the floor of social spending: plus the monetary program, both in terms of reserve floor and credit development. By the way, these figures should be badyzed in relation to inflation and growth, but this does not create surprises. The mission will study the structural aspects, although the only ones required for this disbursement relate to the Central Bank, where there are no serious problems. "

As part of the confirmation agreement with the IMF, the government of Mauricio Macri agreed with the agency to reduce the budget deficit to 0% this year, which implies a significant adjustment during the year. an election year. Until now, the agency has approved the performance of the economy and has disbursed without problem nearly half of the $ 57,000 million of the total loan. If the report that begins Monday is positive, the executive board of the agency must approve in March a new disbursement of $ 10.7 billion. The expectations are favorable since the director herself, Christine Lagarde, recently said that the program in Argentina was proceeding smoothly in accordance with the guidelines.

But beyond the numbers, which now seem more stable, the Fund is now worried about the uncertainty badociated with Argentina's presidential elections in October. According to Alejandro Werner, director of the agency for the Western Hemisphere, a few days ago, there is a "risk" that could undermine trust. There is concern about a "turning point" in economic policy arising from a change of sign within the government. "Obviously, what will be the political framework that will prevail in Argentina from 2020? It will be very important for someone who wants to invest in Argentina for the next decade, "he said.

Loser notes that "the political and political economy context will be a central concern of the mission in terms of program sustainability." This is normal in most countries that have signed agreements, but apart from warnings, it is This is unlikely to create disbursement problems and problems will emerge in future visits, during which the evolution of expenditures and the prospects of continuity or change of administration will be clearer. "