MercoPress. South Atlantic News Agency

IMF praises Milei's achievements but says social and political support needed

“The road to stabilization is never easy,” Kozack said

International Monetary Fund (IMF) Communications Director Julie Kozack praised the “impressive” achievements of President Javier Milei's administration in curbing inflation in Argentina but warned that “it remains important to work pragmatically to build social and political support to help ensure the durability and effectiveness of the reforms” implemented.

Kozack made those remarks at a press conference Thursday in Washington DC, during which she also denied any ongoing negotiations for a new debt refinancing agreement. She insisted the current program between the credit agency and the South American country would remain in force at least until the end of 2024.

“At this point, it would be premature to discuss the modalities of a possible future program,” she added. The IMF and Argentina “are engaged in active discussions in the context of the current IMF-supported program,” she insisted.

Kozack also explained that the IMF's goal was “to support the authority's efforts to restore macroeconomic stability and lay the foundations for prosperous and inclusive growth in Argentina.”

President Alberto Fernandez (2019-2023) signed an agreement with the IMF in March 2022 to refinance the debt contracted in 2018 during the term of conservative Mauricio Macri (2015-2019) for about $45 billion that included ten quarterly reviews.

The IMF board approved on Feb. 1 to extend the agreement until Dec. 31, 2024. In January, after the seventh review was agreed upon, the IMF gave Argentina US$ 4.7 billion in the first handout of the Milei era.

Kozack also highlighted that, in January and February, Argentina achieved a fiscal surplus for the first time in more than a decade. “International reserves are rebuilding, inflation is falling faster than expected and market indicators such as the exchange rate gap and sovereign spreads continue to improve,” she elaborated.

“The road to stabilization is never easy and requires strong policy implementation,” stressed Kozack, who also noted that it will be “important to continue to improve the quality of fiscal adjustment and a worthwhile monetary policy that we will also need to adapt during this transition.”

But Milei's policies are not as praiseworthy for those who saw their income shrink or vanish amid a barrage of stringent measures. In this scenario, Argentine labor union leaders are planning a response to the Government's actions.

The once mighty General Labor Confederation (CGT) is evaluating whether to stage a mass mobilization on May 1 or call for a general strike. The CGT board of directors is to convene on April 11 to decide on the issue, it was reported Thursday in Buenos Aires.

According to CGT leader Héctor Daer, the group will launch a struggle against State worker layoffs, budget cuts, and the criminalization of social protest under the Libertarian government.

The strength of the measure to be adopted depends largely on the content and fate of the new labor reform bill that the Government is sending to Congress, Daer explained.