The IMF celebrates Argentina's "commitment", but warns that the goals of the agreement "will not be altered"

The Minister of Economy of Argentina, Sergio Massa, and the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, greet each other during the meeting held in Washington on September 12, 2022. Ministry of Economy (Ministry of Economy EFE)

The Minister of Economy of Argentina, Sergio Massa, closed this Monday a tour of the United States that left him satisfied.

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, received him in Washington and celebrated "her commitment" to the adjustment that she hopes the South American country will make to comply with the refinancing agreement closed last January.

In exchange, the commitment of an imminent approval of the second review of the agreement's goals was brought back to Buenos Aires, essential for the IMF to release 4,000 million dollars that will go to pay part of the credit that the organization gave to Argentina in 2018. And a word of warning, too: In a lengthy statement, Georgieva said the show's goals "will remain unchanged."

"We have ordered and closed the work path for the second semester with the Fund," Massa said from the Argentine embassy in Washington.

That path requires Argentina to reduce the fiscal red this year to 2.5% of GDP and accumulate reserves in the Central Bank for 5,800 million dollars.

Both goals will be difficult to meet, especially the second.

The Argentine government allocates more and more dollars to support the value of the peso in the foreign exchange market and for the entry of dollars it depends on the agribusiness exporters, who are increasingly reluctant to liquidate their currencies due to fear of a possible devaluation.

The war in Ukraine has also triggered the bill that Argentina pays for gas imports.

Only last year, before the rise in international prices, the Government of Alberto Fernández allocated 11,000 million dollars to the energy bill purchased abroad.

Massa and his team traveled to the United States to go through the second review of the agreement with the IMF and, above all, explain how they plan to comply with the adjustment committed to at least by the end of the year.

The tour ended this Monday with an unscheduled meeting with Treasury Secretary Janet Yellen, and another already scheduled with Georgieva.

Massa also met with David Lipton, advisor to the US Treasury, and Michael Kaplan, the official who follows the Latin American agenda.

The presence of Janet Yellen at the meeting was a surprise and the Argentine minister got the photo that none of his predecessors in office had.

The US vote is key in the IMF.

The meeting with Janet Yellen was an unexpected accolade to the new Argentine minister, with well-known ties to Wall Street.

But the Treasury secretary did not give away the photo.

After the meeting, she said that Argentina must "implement the necessary reforms to rebuild credibility, stabilize markets and lay the foundations for sustainable growth."

Massa replied that her mission is to order the economic chaos in which Argentina finds itself and comply with the agreement with the IMF.

That was the message she later conveyed to Georgieva.

The director of the IMF released an unusually long statement, where she congratulated Massa for "the strong steps that he and his economic team have taken to stabilize the markets and reverse a scenario of high volatility."

“The minister expressed his clear intention to mobilize external support, accentuate efforts to stabilize the economy and guarantee sustainable growth with inclusion, under the principles of fiscal order and the strengthening of reserves.

I welcomed his strong commitment and drive to achieve the program goals, which will remain unchanged, and the conclusive progress made in critical areas,” Georgieva said.

In a balance of the tour that took him to the United States for a week, Massa said that, in his opinion, he returned to Buenos Aires with "enormous achievements."

"I am not satisfied with the results because I believe that the Argentine situation is fragile and we have an enormous task ahead of us in the fight against inflation," he said.

This Wednesday the CPI data for August will be known, which will be above 6%.

The figure will raise the year-on-year figure above 75% and dangerously close to 100% the figure for December.

The minister intended to return with the announcement that the IMF had approved the second review of the agreement's goals, but he will have to wait.

Georgieva clarified that this will only happen “in the next few days”, after the meetings that the teams of both parties will hold virtually during the week.

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