Washington: After approving a new easing of the economic program, the Board of Directors of International Monetary Fund (IMF) He stressed that a “more solid policy package” is necessary to protect the precarious stability of the economy and to maintain the anchor role of the programme. As the fund said it is ‘Necessary’ to maintain primary fiscal deficit target of 1.9% of this year’s GDP to contain inflation, encourage the accumulation of reserves and ease financial pressures.
Deputy Managing Director of the Fund, Gita GopinathHe said in a statement issued in Washington that “the economic situation has become more difficult” due to drought and “political setbacks,” and that he stressed the importance of reducing the fiscal deficit to contain inflation, encourage the accumulation of reserves, and ease the fiscal deficit. Financial stress – a thinly veiled reference to the dollar – is strengthening debt sustainability. In addition, Gopinath has fully entered into a very sensitive political issue by pointing out, at the right time, the need to ‘mitigate’ the financial cost of the new pension moratorium by allowing entry “Only for those who need it most”.
“Given the magnitude of the climate shock, some downward adjustment in reserve accumulation targets is warranted, although a stronger policy package would be necessary to protect stability and maintain the programme’s primary role,” Gopinath said.
On Friday in Washington, the IMF’s Executive Board approved the fourth revision of the Extended Facility Agreement (EFF, according to its English acronym) for Argentina. The resolution automatically issued a new $5.4 billion tranche, bringing the total funds received under the existing program, which was approved a year ago, to nearly $29 billion.
And yesterday, unlike previous announcements, the fund announced the decision in a brief two-paragraph statement. This Saturday, the fund issued the traditional statement that usually accompanies cabinet decisions blackboardcomments Gopinath, who presided over the meeting because the head of the International Monetary Fund, Kristalina Georgieva, was in China. Among the reasons for this delay is that the Minister of Economy, Sergio MassaYesterday his team returned from the United States to Buenos Aires on a private plane without WiFi, and they were incommunicado during the flight. Argentina’s approval also followed blackboard The Ukraine Program discussed, among other topics, such as the Article IV Review of Saint Kitts and Nevis. The fund has yet to release a staff report – it is expected to be in the coming days – with the broadest and most in-depth diagnosis of the economy, and the agreed commitments between government and staff contained in the letter of intent and policy note.
The letter left by Gopinath makes it clear that after the IMF agreed to ease the reserve target – the statement also did not specify how much – efforts are now focused on meeting the fiscal deficit target.
In the Ministry of the Economy they insist that the commitment for this year is firm, although they admit that it will be necessary to do so “extra efforts” To achieve this, firstly, due to the effect of drought, and secondly, due to the freezing of Social Security, which, according to official calculations, this year will cost about 0.2% of GDP. And within these “additional efforts” appear, for example, the new program to encourage exports “agricultural dollars”, which will have an impact on the collection of deducted amounts, and the progress in fragmentation of electricity rates, which passed for the month of May, a delay that Fondo did not like.
Gopinath said the cost of the suspension should be “mitigated” by serving “only those who need it most”.
Achieving the primary fiscal deficit target of 1.9 percent of GDP by 2023 remains important. necessary To support the reduction of inflation and the accumulation of reserves, the easing of financial pressures and the enhancement of debt sustainability,” Gopinath said. “Timely implementation of high-quality measures, particularly better targeting of energy subsidies and social assistance, will help offset reduced export taxes due to drought, protect priority infrastructure and social spending, and ensure fiscal targets,” he said.