The Minister of Economy,
Luis Caputo, received today around noon the number 2 of the International Monetary Fund, Gita Gopinath, within the framework of his surprise visit to the country to monitor the progress of the adjustment plan
after the failure of the omnibus law and review the reforms planned by Javier Milei's government before the next review of the program in May.
Gopinath landed this morning in Buenos Aires accompanied by Luis Cubeddu, deputy director of the Western Hemisphere department, Ashvin Ahuja, head of the IMF mission for Argentina, Ben Kelmanson, resident senior representative of the organization in Argentina and Matthew Jones, senior advisor to the first deputy director. Fund manager.
"The First Deputy Managing Director of the IMF, Gita Gopinath, arrived today in Buenos Aires where she will hold meetings with President Milei, his economic team, academics, civil society, businessmen and workers," said sources from the organization. From the Government, meanwhile, They confirmed that the official will meet with Milei tomorrow at Casa Rosada.
Caputo met at the Palacio de Hacienda from noon until the afternoon with the economist's team.
It was not the first time they met face to face.
Gopinath had met the minister and Javier Milei at the World Economic Forum in Davos in January.
The visit would aim to clear up
doubts in the organization and Wall Street about the political sustainability of the program
approved three weeks ago.
The organization's latest staff report mentions the risks faced by the program, among them, the social situation.
The Government made progress in a strong adjustment of fiscal accounts, which was reflected in the primary and financial surplus achieved in January, the largest in 12 years.
Caputo, in turn, celebrated in recent days the slowdown in inflation, the accumulation of reserves and the reduction of the exchange rate gap, although he warned that the coming months are going to be "very hard."
At the Fund there is concern about how the numbers will continue after January.
After the fall of its first law in Congress, the Executive cut public spending almost 40% year-on-year in January through the postponement of subsidy payments to CAMMESA, the elimination of the fund for paying teachers (Fonid) and a strong liquefaction of pensions.
The organization knows that these spending measures can hardly be sustained over time to ensure a "zero deficit."
Neither does the collection through taxes associated with the devaluation, with the official dollar rising at 2% monthly.
Caputo tried to compensate for the delay in approving the law with these cuts, the PAIS tax and the increase in the fuel tax.
"The parliamentary setback costs the fiscal package a reduction of the adjustment of 0.5% compared to what was presented to the IMF or 0.8% compared to the original program. For the moment, withdrawing 0.5% of GDP from other sources does not "It seems like a great challenge although, again, the risk refers to the fiscal sustainability of a magnitude adjustment that is increasingly based on spending cuts and less on tax increases," said a report by the consulting firm PxQ.
Without the support of Congress, Milei embarked on a tough confrontation with the governors.
In this framework,
Gita's presence aims to reinforce support for the government and unblock reforms at a time when the economy is going through a strong recession
.
Due to the impact of inflation on income, consumption and activity, the IMF expects a fall of 2.8% in 2024.
On January 31, the Fund approved the disbursement of US$ 4.7 billion with which the government paid maturities of US$ 1.9 billion that month and US$ 600 million in interest in February.
In exchange, Argentina committed to achieving a primary fiscal surplus of 2% of GDP by the end of this year and to accumulate US$10 billion in reserve purchases by the end of 2024.