The International Monetary Fund (IMF) stated this Thursday that it will be “a challenging task in light of the global situation”, marked by the war in Ukraine and the consequent increase in the price of raw materials “which is already affecting inflation” in emerging economies, carry out the program agreed with Argentina in the framework of debt renegotiation, although he pointed out that “wide political and social support would be essential for the general success” of these guidelines.
This was expressed by the spokesman for the multilateral credit organization in his usual fortnightly press conference, a few hours before the start of the debate in the Senate of the Nation of the agreement with the Fund, after the majority endorsement he received last week in the Chamber of Deputies.
There, referring specifically to the Argentine case, Rice specified that The 30-month program implied by the agreement “seeks to start reducing the persistently high inflation through a multiple strategy that implies a reduction of the monetary financing of the fiscal deficit, and a new framework for the implementation of the monetary policy to generate positive real interest rates, to support the assets in pesos”.
This of course, Rice continued, “It will be a challenging task in light of the evolving global environment, as rising commodity prices are affecting inflation around the world.”
In this way he responded when asked about the possible impact of the war situation on inflation and on the goals of the program.
At this point, Rice specified that “Argentina, like other emerging economies, is already being affected by the war in Ukraine, even with the increase in world prices of raw materials that is already affecting inflation.”
In this context, the IMF spokesman maintained that, despite the fact that the technical team is evaluating the impact of the war on growth, and the external and fiscal balances, “the uncertainties continue to be great and depend on the duration of the conflict,” in reference to the conflict.
“We believe that broad political and social support in Argentina would be critical to the overall success of the economic program. You know, broad ownership, broad political and internal support is key,” Rice considered, after refusing to comment on the position of Vice President Cristina Fernández de Kirchner and her space, before a journalistic consultation, about the technical understanding reached by the Executive Power in the renegotiation of the unprecedented loan for some US$ 45,000 million contracted by the management of Mauricio Macri in the last stretch of his mandate.
“We don’t comment on domestic politics,” Rice responded.
Finally, He stated that if the new Resilience and Sustainability Fund progresses, which provides for more flexible lines for countries and is under discussion at the IMF, Argentina could be eligible in the future.
“If the IMF Executive Board were to establish a new facility with a longer repayment period for which Argentina would be eligible, IMF staff would no doubt be happy to work with the Argentine authorities to facilitate the request for support,” both for the Argentina as for other member countries.
In this framework, however, he pointed out that, as always, “a request for financing of any facility is subject to the approval of our Board.”
In this regard, Rice stressed that “greater progress is expected to be achieved by the time of the Spring Meetings” next April.
