Inflation falling ‘a little faster than expected,’ says Georgieva

Argentina’s inflation “is coming down a little faster than initially expected,” International Monetary Fund (IMF) managing director Kristalina Georgieva said Thursday.

It was the latest in a series of positive assessments from the IMF for President Javier Milei’s administration. The multilateral lender has been vocal in its support for the new government since the libertarian leader’s arrival to office last December.

The IMF still expects inflation to exceed 150 percent this year, though it forecasts a considerable slowing in 2025. 

Despite high year-on-year inflation, price increases moderated for a third consecutive month in Argentina in March, reaching 11 percent, according to data from the INDEC national statistics bureau

Though many citizens are struggling to make ends meet, Georgieva seems satisfied with Milei’s fiscal adjustment.

“Argentina, a country that has long been perceived as a laggard from the point of view of reforms, is now moving very quickly in adjusting fiscal spending, gaining the capacity of private investment,” she said during a press conference in Washington this week. 

Nevertheless, both the IMF and the World Bank have warned the Milei government not to leave “the most vulnerable” behind. More than half of the population lives in poverty and social unrest is growing in response to fierce austerity and a wave of public sector lay-offs.

The remarks came just hours before Economy Minister Luis Caputo was due to meet IMF Deputy Managing Director Gita Gopinath for talks. They were expected to discuss Argentina’s economic targets for the first quarter.

The main aspiration of the Argentine delegation, which includes Central Bank Governor Santiago Bausili, is to convince the IMF and the US Treasury to extend its current US$44.5-billion credit programme so that the country can access fresh dollars to accelerate its exit from capital controls.

Earlier this week, IMF economists forecast that Argentina’s economy would contract by 2.8 percent this year. 

As for Latin America in general, Georgieva applauds the fact that countries have put their policies in order, “which have allowed them to reduce inflation faster” than elsewhere.

– TIMES/AFP/NA