“All the meetings were fabulous.” This is how they described Scopein the environment of the president Javier Milei, the result of the meetings held this Tuesday by the head of state with leaders of China and India and the head of the International Monetary Fund (IMF), Kristalina Georgieva, in Rio de Janeiro.
In particular, the meeting with Georgieva generates expectations given that the current agreement between the country and the IMF is close to ending and there are still two reviews of the multilateral organization.
Argentina has not yet formally requested to discuss a new agreement, but intense conversations are taking place with the team in charge of Luis Cubedduin charge of Argentina in the Fund.
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Had another productive meeting with President @JMilei of Argentina. We took stock of the impressive progress in stabilizing the economy and making it more market-based. We stand ready to support Argentina and its people in building on these achievements. pic.twitter.com/pTqFYZjdFA
— Kristalina Georgieva (@KGeorgieva) November 19, 2024
Specialists point out that when the request for a new agreement is formalized, the pending reviews would be subsumed in these conversations. It should be noted that a new program with the IMF should include fresh funds, as stated on more than one occasion by official authorities.
The current economic situation allows Argentina to negotiate more firmly than on other occasions. It is that the country shows fiscal balance, not only in numbers but also in the political will to strictly respect this premise.
In this sense, the decision of the president of the ruling party is interpreted, José Luis Espert, to suspend the meeting of the Budget and Finance Commission scheduled for this Tuesday because “after two months of intense work at the center of the Budget and Finance Commission, we have received 7 officials from the Executive Branch from different areas with more than 30 hours of work meetings. However, we have not yet reached a common point that allows us to guarantee zero deficit” to conclude by stating: “zero deficit is not negotiated, with zero deficit everything, without zero deficit nothing.”
These statements were supported by Milei himself. The political will to maintain fiscal balance usually weakens in an electoral scenario, but it is not the attitude of the ruling party: One of the central axes of Libertad Avanza is precisely to attack the causes that generate expenses from the State.
The tension on this point with the provinces is also understood by the fact that legislative elections will be held next year. In the first ten months of the year, current transfers to provinces fell 67.8% in real values according to data from the consulting firm ACM based on information from the Secretary of the Treasury.
“There is no money”
Sources from the Casa Rosada point out that the governors are asking for an increase in spending in the order of US$3.7 billion without identifying where these resources will come from.
However, The national government remains firm in the premise of controlling spending since, beyond considering it key to the economic program, it is also part of its political strategy expressed through the fight against “caste.”
These factors, to which are added the decrease in country risk and the rise in local assets will allow, According to specialists, Argentina could go out and place debt on the international market in the not too distant future.
It is within this framework that negotiations with the Fund are carried out where the organization’s technicians have little to reproach. The deviations refer to the goal of reserve accumulation and the issue of different exchange rates (precisely, restrictions due to the lack of foreign currency) and which is precisely what the organization could contribute to improving with fresh funds. Furthermore, one of the fundamental purposes of the Fund is to financially assist its partner countries in the face of external restriction.
Although the authorities have maintained a strict reservation regarding what was discussed with Kristalina Georgieva, From both sides they took care to express their satisfaction with the meeting.
Support
Furthermore, the new president of the United States, Donald Trumpwas explicit in its support for Milei by inviting him days ago to the Conservative Political Action Convention (CPAC) that took place at the Mar – A- Lago Complex, in Florida.
This good harmony with the Argentine Government reinforced by Elon Musk (He will be an official of the Republican administration in a department with deregulation tasks, similar to the one carried out Federico Sturzenegger in the country) gives rise to estimates that the IMF could grant Argentina a new loan.
In fact, in a post after the meeting with Milei, Georgieva said: “We took stock of the impressive progress made in stabilizing the economy and strengthening it in the market. We are willing to support Argentina and its people to continue advancing these achievements”.
“And, if you want to continue helping us “The only thing we need is to strengthen the reserves of the Central Bank”they usually say in official offices. The mystery, they estimate, could be revealed before the end of the yearthose who follow this topic speculate.
[Guest 1]: Hello everyone, my name is Maria Gonzalez, and I am here to discuss today’s topics in the news. Our first guest is Dr. Martin Perez, an economist at the University of Buenos Aires, and our second guest is Ms. Laura Martinez, a political analyst specializing in Latin American affairs. Thank you for joining us, Dr. Perez, could you please share your thoughts on Argentina’s recent meetings with China, India, and IMF officials?
[Guest 2]: Thank you for having me, Martin. Argentina’s meetings with China, India, and IMF officials have been quite productive, especially in the context of its ongoing economic stability and market-based approach. The meetings have generated expectations not only for a possible new agreement with the IMF but also for increased foreign investment in the country. What are your thoughts on this matter?
[Guest 1]: Thank you Laura, Dr. Perez, how do you see these meetings impacting Argentina’s economy in the short and long term?
[Guest 2]: Well, Maria, these meetings could potentially lead to increased foreign investment and access to fresh funds, which would help stabilize Argentina’s economy in the short term. However, in the long run, Argentina needs to continue fostering a market-based approach and ensuring fiscal discipline to maintain this stability. The upcoming elections and tensions with the provinces over spending could pose challenges to this goal. What do you think?
[Guest 1]: Absolutely, Laura. Dr. Perez, could you please expand on the importance of fiscal discipline in Argentina’s economic strategy?
[Guest 2]: Of course, Martin. Fiscal discipline is a crucial component of Argentina’s economic strategy under President Milei and his ruling party. They have shown commitment to reducing government spending and attacking the “caste” system, which they believe contributes to unnecessary expenditures. This is also important for controlling inflation and ensuring the country’s sustainable growth. However, they must navigate tensions with the provinces over spending, which could impact the upcoming legislative elections.
[Guest 1]: That’s interesting, Laura. Dr. Perez, could you please provide insights
