The International Monetary Fund (IMF) today welcomed Argentina’s first set of economic measures announced by its new government.
These measures focus mainly on increasing the exchange rate, cutting state spending, and reducing subsidies. They are part of a fiscal convergence program.
Julie Kozack, IMF’s Director of Communications, released a statement on their website.
It stated that the IMF’s technical staff supports the measures announced by Argentina’s new Economy Minister, Luis Caputo.
The communication highlighted that these initial strong actions aim to improve public finances significantly.
They focus on protecting society’s most vulnerable and strengthening the exchange regime.
Their determined implementation will help stabilize the economy and lay the groundwork for more sustainable, private-sector-led growth.
Minister Caputo announced the government’s first ten economic actions today. These aim to reduce the fiscal deficit.
Essential actions: raise exchange rate to 800 pesos, halt public works, cut state management ads, end energy subsidies, introduce import monitoring.
Other announcements included not renewing contracts with less than one year of validity, downsizing the state by reducing the number of ministries from 18 to 9, and minimizing national transfers to provinces.
Commitment to continue working with the Argentine Executive
The IMF reaffirmed its commitment to continue working with the Argentine Executive within their financial program.
This collaboration aims to address an estimated total debt of 44.5 billion dollars.
“The IMF staff and new Argentine authorities will work swiftly in the coming period,” stated the release.
The IMF noted that this new package of measures forms a solid base to continue discussions.
These discussions are to steer the current program supported by the Fund, following recent setbacks in economic policy.
The measures include maintaining social programs to protect the most vulnerable in the face of high inflation.
These programs include the “Universal Child Allowance,” “Empower Work,” and “Food Card.”
Minister Caputo revealed the new government inherited Argentina’s direst historical situation, marked by high poverty and a fiscal deficit surpassing 5.5% of GDP.