The Economy Minister Sergio Massa, garnered political support from the United States Government during a week-long visit to the North country, to which he also added the endorsement of the International Monetary Fund (IMF) and other multilateral organizations and the announcement of investments in the real economy with a focus on 2023.
The tour – the first of an international nature carried out by the minister since his assumption of office in the first days of last August – had its kick-off with the announcement of the Inter-American Development Bank (IDB) of the approval of loans for US$3,000 million, of which US$1,200 million will be freely available and will go to increase the reserves of the Central Bank.
This announcement, boosted by the joint conference that Massa gave with the head of the IDB, Mauricio Claver-Carone, was a signal that boosted existing expectations in the World Bank, the IMF and the Paris Club.
to which they joined meetings held with investors and analystsand with the United States government itself, because everyone was closely watching the reserve numbers and the measures put in place by the minister to stop the balance of payments crisis in which the country was trapped in the winter , in which Russia’s invasion of Ukraine had a lot to do with it because it sent energy prices skyrocketing.
One issue that Massa sought to make clear to Treasury and State Department officials was the impact of the war in Ukraine, as In imports of the energy category, around US$5,000 million went.
Regarding how the conflict affected the country’s projected income, Massa pointed out that Russia planned to grant a direct loan of US$6.2 billion to Argentina through the bilateral support program between IMF members in SDRs. (the organization’s currency), a possibility that was frustrated by the war.
Something similar happened with the swap with China, where US$8,000 million were initially expected, which also did not arrive due to the change in the geopolitical situation as a result of the conflict between Russia and Ukraine.
As far as multilateral organizations are concerned, the Inter-American Development Bank had US$ 800 million tied up and credits to be disbursed for another US$ 900 millionaccording to the calculations of the minister.
This number had already been anticipated by Massa in Argentina to the ambassadors of the countries that make up the G7 in a meeting he held at the end of August in Buenos Aires.
During your visit, Massa conveyed to the United States Government and the main directors of the International Monetary Fund that Argentina is going to “comply” with the goals agreed upon with the organizationwithout modifying the agreement signed in March 2022, something that Kristalina Georgieva highlighted in the statement she distributed after the meeting she held with the head of the Treasury Palace.
Thus, the support of the IDB raised the reserve floor and facilitated the progress of the negotiations with the IMF for the closing of the second revision of the agreement.
Another multilateral organization, The World Bank announced that there will be net disbursements of US$400 million between now and the end of the year, to which another US$500 million will be added.
Strictly speaking, with the World Bank, US$900 million will enter, which will be reflected in the external accounts, which have as a condition that Argentina contribute a similar amount for the investment project that will be carried out.
The support of other multilateral organizations, after the pandemic and once the war between Russia and Ukraine began, is one of the requests that the IMF has been making for months and that Massa’s trip to the US managed to unlock.
During the last week, almost the entire economic team and officials of the Central Bank held parallel technical meetings with the agencies to come up with the timing of the negotiations.
On Monday, his last day in Washington, Massa took the commitment that there will be a “staff agreement” favorable to the country “in the next few days” so that it can be later approved by the IMF board.
Despite the efforts made, the document of technical rigor was not finalized, since it operates as a kind of legal contract, which requires compliance with deadlines for final approval.
Another of the things that Massa brings to Argentina as a result of his visit are the investments promised and ratified by automotive, mining and oil companies, with a focus on 2023.
