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The reasons of the IMF behind the change of the economic program with Argentina


The Fund prefers to patch up the program to prevent the economy from exploding and wait for a new government.

The International Monetary Fund shuffles and gives again, they assure in Economy.

After the organization affirmed several times that the main guidelines of the agreement initiated by Martín Guzmán and continued by Sergio Massa were not going to move, little by little

the objectives began to crack


The program will now be recalibrated point by point, to be reviewed in light of the drought that, they say, changed everything.

Is the IMF decision surprising?

It was seen coming, because the program was on the brink of the abyss and the Government asked for help.

The Fund

had no choice but to accept

the Argentine reality, dramatic, changing, volatile and much more in an election year.

And with the additional


of a very serious drought.

For the organization, and also for the United States, it is better to have 

a patched-up program

with Argentina , which sets at least

some control guidelines,

to be able to get around this difficult stretch that is coming until the next government takes office without an explosion.

The White House endorses this decision.


memories of what happened with the disaster after the last PASO

and the departure of Mauricio Macri are latent in the corridors of the Fund and in the US government.

The 2018 agreement was paralyzed in the nebula for almost two years: the IMF had to wait for the government of Alberto Fernández to first negotiate with private creditors and then focus on the debt with the agency.

They do not want such a scenario to repeat itself

and decided to open the umbrella sooner rather than later.

Decision processes are slow in Washington and dates are coming up.

That is why the economic team stays in this city and bets on solving new guidelines - which may include change of goals, postponement of payments or advance disbursements and other tools - in a few weeks.

Massa may return to Washington in 15 days.

Times press.

Massa had been meeting the original goals last year, of course with some accounting maneuvers and

"creative" plays

such as the soybean dollar that are not in the Fund's manuals, but that

the body tolerated


The last report from the staff was

much harsher than the previous ones


The implementation of the policies has become “less reliable”, they said, calling for the 1.9% of GDP target to be maintained.

But the drought,

beyond the fact that the Government uses it as an excuse for everything

, is a serious reality that added an additional burden to a

very small and agro-dependent economy

like Argentina's.

The Fund understood this in the fourth review and relaxed the international reserves target by US$3.6 billion this quarter and 1.8 billion at the end of the year.

But it was no longer enough even with that and

Massa's tricks were no longer enough


Nor the hustle and bustle before the organisms.

The minister defines himself as

"a beggar":

"I ask for money from each one I see,"

he says.

And in Washington he "scratched the pot" with loans from the IDB, the World Bank, Saudi sovereign funds.

But, to give an example,

US$ 200 million from the IDB can evaporate from the Central in just one day.

Somehow, the IMF agreed to facilitate the famous "bridge" that President Alberto Fernández asked Joe Biden at the White House to overcome the impact of the drought.

It is not clear where this bridge of aid leads on the electoral level, but

in Washington they do not want Argentina to explode.

It is not for charity but the US has its interests.

They value lithium, gas and food reserves

, all strategic resources at critical moments, and

fear the Chinese advance


The Biden government

now mistrusts Lula,

on whom they had bet some chips in the region, because of his positions on Ukraine and China.

Lula's statements about the Fund "suffocating" Argentina did not go down well.

Before announcing the recalibration with Gopinath, Massa met with Biden's top economic and political officials.

But where does the “bridge” that the Government wants to cross with the help of the Fund and the US lead to?

Obviously, the agency would like to talk in the future with

a government that is less fragmented

than the current one and more akin to the market.

And if they have to negotiate with Javier Milei?

Little affected by words,

the gaze of the officials freezes.

It is clear that the Fund's outlook would be complicated by a president who wants to close the Central Bank and dollarize the economy.

In the reformulation of the program there will be concessions, but

the limits will not run too much.

Although they can alleviate some goals or tools, the Fund

will not stop asking for an adjustment based on the elimination of

energy subsidies, a

cut in social plans

and the

retirement moratorium,

where they seek to add half of the 800,000 stakeholders announced so that it does not have as much impact on the deficit.

How far will the Fund yield?

Massa will seek to pull the rope as much as possible, but the body itself has its hawks who distrust Argentina.

That will be defined these weeks.

The adjustment will continue, but at a

slower pace in these months, which are so delicate.

Washington (correspondent)

look also

In the middle of an act, Alberto Fernández sent a message to the IMF: "They are not going to suffocate us, we cannot let them suffocate us"

Lula da Silva criticized the IMF for "suffocating" the Argentine economy

Source: clarin

All business articles on 2023-04-15

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