The International Monetary Fund urged the Argentine President Javier Mili to ensure social assistance for the poor, while continuing his extremely liberal economic reforms and aiming to reduce the budget deficit to zero.
Geeta Gopinath, Deputy Director of the International Monetary Fund, said in an interview with the magazine “La Nation” on Sunday: “Concrete measures taken to respect budget cuts must be adjusted in a way that ensures the continuation of social assistance and does not place the full burden on the most vulnerable groups.”
Argentina has a $44 billion loan program with the International Monetary Fund (IMF). Guibeneath visited this South American country on Thursday and Friday to assess the progress it has made and to meet with President Mily and his government. However, economic experts and representatives from social organizations are calling for more assistance from the state.
Within two and a half months of taking power, the government reduced the value of the peso by 50%, deregulated overall prices, lifted wide-ranging regulatory restrictions, made drastic budget cuts in an attempt to achieve a zero deficit this year, and contained inflation that had reached 254%. More than 50% of the Argentine population is living below the poverty line.
Gobinath emphasized the importance of preserving the true value of retirement pensions and social assistance despite inflation, pointing out that the economy inherited by this government was on the verge of crisis and requires bold and decisive measures to pull it out of the abyss. She added that despite some social assistance measures being implemented, other measures will be necessary to ensure that budget deficit reduction does not fall on the shoulders of vulnerable sectors of society.
A deputy director at the International Monetary Fund considered it “very important to invest in human capital”, emphasizing that “the high rate of child poverty exceeding 55% is very concerning” and recommended “investing more in education”.
Regarding Argentina’s plan to dollarize its economy, Gopinath considered that “the decision related to such a monetary system for a country is a sovereign decision.”
