IMF holds talks with Argentina’s opposition economists
International Monetary Fund (IMF) specialists Friday held separate video conferences with economic teams from Argentina’s two main contenders for the Oct. 22 presidential elections: La Libertad Avanza (LLA) and Juntos por el Cambio (JxC).
Candidate Javier Milei of LLA, an economist himself, told the IMF that he intends to make an adjustment more important than the one requested by the global agency.
Milei’s plan includes major fiscal adjustment, exchange rate unification, a cut in expenses to close the financial deficit, opening up the economy, a deep reform of the State, the modernization of labor laws, and a monetary reform leading to the closing of the Central Bank (BCRA), it was reported in Buenos Aires.
”Javier Milei explained LLA’s economic and financial plan and the 3 stages (generations). The IMF explained the nature of the current agreement and its expiration date. Javier clarified: ‘We are not going to defaulter neither the IMF nor the sovereign debt’, according to Economist Dario Epstein of Milei’s team.
In today’s meeting with the IMF, I expressed my concern about the financial situation that will be faced at the time of receiving the government. I indicated that in the month of December payments of Christmas bonuses, salaries, and vacations will have to be made and that I had doubts about the cash situation that will be received, former Deputy Economy Minister Carlos Rodríguez posted on social media. He is another member of Milei’s group of experts who participated in Friday’s talks.
Dario Epstein called attention to the large amount of existing undocumented debt for retained dividends and import payments. We also indicated the intention to continue with the disbursements of the current program and not to resort to debt default as an adjustment measure, as well as the will to regularize all domestic debts as soon as possible, he added.
The meeting was also attended by Diana Mondino, who is likely to become Foreign Minister if Milei wins, and former Economy Minister Roque Fernández, in addition to IMF’s Western Hemisphere Director Rodrigo Valdés and members of his staff.
The discussion was an opportunity to exchange views on Argentina’s current economic outlook and to understand its economic policy priorities, the IMF said in a statement about one of the Fund’s regular and routine contacts with a wide range of political and economic references,” in the aftermath of last Sunday’s Mandatory, Simultaneous, and Open Primary (PASO) elections in which Milei came out as the most-voted candidate and Patricia Bullrich prevailed over Buenos Aires Mayor Horacio Rodríguez Larreta on the JxC front.
Economist Carlos Melconian outlined Bullrich’s proposals to Valdés and to the IMF’s chief delegate in Argentina Luis Cubeddu. Before the meeting with Melconian, both Valdés and Cubbedu also talked virtually with JxC’s Luciano Laspina, Guillermo Mondino, Gabriel Lopetegui, and Pablo Guidotti.
According to local media in the Argentine capital, the consultants delved into the need for a smooth political transition to reduce the fiscal deficit and strengthen the Central Bank’s reserves. Congressman Laspina was concerned about the depth of the fiscal deficit, the scarcity of reserves, and monthly inflation in double digits from August to at least December.
Bullrich’s team also pointed out that the last IMF disbursement of 2023 should be negotiated with the future president. Therefore, it would not be before the second half of November in case a runoff (scheduled for Nov. 19) is needed.
Economy Minister and presidential candidate Sergio Massa of Unión por la Patria (UP) is expected to travel to Washington DC next week for talks with the IMF regarding the upcoming disbursement of around US$ 8 billion to pay up loans taken with the CAF and Qatar, plus the replenishment of the Chinese swap used to cancel the July and August payments while feeding the BCRA reserves.