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Without an omnibus law, Argentines will suffer more

And, he clarified that, in this hypothetical case, the 0.9% imbalance (foreseen in the previous understanding) would not return.

The government of Javier Milei It is not willing to issue or request loans (not even from the IMF) to avoid lowering state spending.

What’s more, he considers that balancing public accounts should not only be a task of the national government, “the provinces must also do their thing.” He knows that cuts in privileges – not just in politics – will generate resistance, but he is convinced that there is no alternative and that is why it is necessary to go “deep.”

The IMF itself highlights the scope of the measures “The authorities intend to achieve a primary surplus of 2 percent of GDP this year (consistent with general equilibrium), through a combination of income and expenditure measures.” Given that the Milei government received an estimated imbalance of around 3 points, The objective implies a correction of no less than 5 points of GDP.

Ambit He asked the minister if the program contemplated assistance to the middle sectors that will be affected, among other factors, by the rate increase, but he did not respond to this specific point.

The question that specialists raise is to what extent the population will continue to support the Government, beyond the fact that different sectors may agree with most of the measures, since salaries will lose close to 10% between December and March, according to Ecolatina. In the case of the informal sectors, the situation is worse.

No new debt

The head of the Treasury Palace did clarify that “the program does not include taking on new debt”because “in our economic alignment we want to end up not having to ask anyone for money.”

For his part, the head of the Central Bank, Santiago BausiliI need to “nor there are changes in monetary and exchange policy”, from which it is interpreted that The government will continue with the crawling peg of 2% monthly.

The statement by the head of monetary policy coincides with a time in which financial dollars are rising and the market distrusts that the official guideline of 2% can be maintained, as shown by dollar futures that anticipate increases starting in March. .

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The statement released by the Fund was very complimentary of the Argentine plan. He noted that “the President Javier Milei and his economic team acted quickly and decisively to develop and implement a strong policy package with the aim of restoring macroeconomic stability, demonstrating complete determination to bring the current program back on track.”.

Although the organization recognizes that ““Conditions will get worse before they get better”, also highlights that an intensification of the crisis is being avoided. And he states that ““The authorities are gaining social and political support for their stabilization plan.”.


In particular, Caputo referred to the problem of retirees and considered that the current update formula “is detrimental” to the passive class. In this regard, he estimated that, in the last four years, and depending on the segments considered, retirements fell, in real values, between 15 and 45%.

After stating that “contrary to what some maintain, we are wanting to protect retirees” and highlighting that “We are not going to allow the purchasing power of retirees to fall.” It is inferred, from what was stated by the minister that, if the current updating formula were not annulled, the Executive would compensate the most affected sectors with bonuses, as it already did at the beginning of the year.

In the same sense, the Fund’s statement indicates that the Argentine Government plans to preserve the real value of pensions and increase social assistance, as conditions justify.


The strong criticism that the Fund raises in relation to what was done by the previous Government is striking, despite the fact that at the time it approved the revisions of the Argentine program, without paying too much attention to the inconsistencies.

It notes that “The new administration inherited an exceptionally challenging economic and social situation, with growing macroeconomic imbalances that mainly reflect inconsistent and expansionary policies, especially during the last quarters of last year. “Monthly inflation accelerated to 12.8 percent in November, reserves were depleted, the currency became even more overvalued and the exchange gap increased to historic highs.”

He also stated that “The continued dependence on Central Bank financing and interventionist measures led to a further deterioration of the central bank’s balance sheet and an over-indebtedness of importers’ commercial debt. Meanwhile, real wages fell further to multi-year lows and poverty levels are estimated to have exceeded 45 percent.”

Following the endorsement of the current Government’s proposals, the IMF considers that “as policies are implemented and credibility is rebuilt, “A gradual process of disinflation should begin, accompanied by an additional strengthening of reserves and an eventual recovery in production, demand and real wages.”

This Thursday, the organization’s spokesperson, Julie Kozack He will offer his usual conference and it is expected that he will refer to the Argentine case.

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