IMF Admits That Program With Argentina Failed Its Objectives

The Argentine government agreed with the International Monetary Fund (IMF) that the program under which the country was lent 44 billion dollars failed because it did not meet any of its four goals: to generate confidence, protect the neediest sectors, understand the inflation phenomenon and reduce the balance of payments problems.

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"The Argentine Republic understands that the program failed because it did not achieve any of the following four objectives outlined in the agreement," the Ministry of Economy stated its position in a document to which Sputnik Agency had access.

Buenos Aires expressed its opinion after the IMF's position was made known, which evaluated the failures of the credit granted to the previous government for 57 billion dollars, of which 44 billion were disbursed.

The South American nation understood that "the country's external fragility was neglected, minimizing the risks of capital account liberalization."

Secondly, "there was a mistaken view" on the inflation mechanism since the Fund did not take into account the inertia that leads to price increases, as well as on monetary policy, which also obeys multiple causes.

In parallel, "emphasis was placed on fiscal contraction in a recessionary context," wielded the portfolio headed by Minister Martín Guzmań.

In addition, there was an excess of optimism, assuming that the loan granted to the administration of then-President Mauricio Macri (2015-2019) would allow recovering the markets' confidence.

In addition, for the current government, "the effects of structural reforms were overestimated and their risks were minimized," since reforms should be aimed at increasing employment through an inclusive and sustainable growth of the economy.