A spokesman for the international organization said that “measures create the foundations for sustainable growth.” However, the plan envisages maximum exchange rate devaluation and increased inflation
President of Argentina, Javier Milei
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247 The International Monetary Fund (IMF) today expressed support for measures announced by Argentina's new Economy Minister Luis Caputo in line with farright President Javier Milei. In a statement published this Tuesday (12), Julie Kozack, spokesperson for the IMF, praised the measures that involve cuts in public investments and the reduction of ministries and could lead to the impoverishment of the Argentine people with a maximum devaluation of the exchange rate and a significant increase in the Inflation in the country.
“IMF staff welcome the measures announced today by new Argentine Economy Minister Luis Caputo. These bold first measures aim to significantly improve public finances to protect the most vulnerable in society and strengthen the exchange rate system. Implementing these measures will contribute to stabilization.” “We will strengthen the economy and lay the foundation for more sustainable, private sectorled growth,” said Kozack.
Among the measures announced is the sharp devaluation of Argentina's currency, raising the value of the official dollar to 800 pesos, a price that has more than doubled compared to the previous value of almost 350 pesos. This move was justified as a decisive measure to “prevent an economic catastrophe,” as Minister Caputo highlighted in his recorded message.
CONTINUED AFTER RECOMMENDATIONS
Additional measures proposed by the government include a deep cut in public spending and reform of the state, which were discussed with President Milei until the last moment. Measures such as the nonrenewal of state employment contracts with a term of less than one year, the suspension of advertising materials for one year, the drastic reduction in the number of ministries and state secretariats and the minimization of voluntary transfers to the states were announced as part of the economic adjustment plan.
Caputo highlighted the seriousness of the current economic situation, pointing to a budget deficit of more than 5.5 percentage points of GDP and warning of the risk of hyperinflation, with inflation already reaching 300% per year. The minister stressed that the situation could get worse before it gets better, citing Milei's inaugural speech which raised the possibility that inflation could reach astronomical levels of 15,000% per year.