MercoPress. South Atlantic News Agency

IMF/Argentina talks “very constructive”; growth estimate falls to 1.3% from 2.5%

“Talks are well advanced”, underlined Alejandro Werner

The International Monetary Fund said on Monday that talks with Argentine authorities for financial support are well advanced and the plan is driven by Argentina priorities with a particular focus on protecting the most vulnerable.

 Analysts interviewed by the Argentine central bank said their inflation estimates for 2018 have risen to 27.1% from 22%, and growth outlook to 1.3% from 2.5%.

IMF’s Director of the Western Hemisphere department, Alejandro Werner made the following statement regarding the negotiations between IMF staff and the Argentine government on Fund financial support for their economic plan.

“IMF staff and the Argentine authorities have been engaged in a very constructive and close dialogue in response to the authorities’ request for financial support for their economic plan. Talks are well advanced. As we have said all along, this will be a plan driven by the Argentine government’s priorities, with a particular focus on protecting the most vulnerable, and strengthening the local economy in light of the recent financial market turbulence.”

Meanwhile in related news analysts surveyed by Argentina’s central bank raised their median view of full-year 2018 inflation to 27.1% in May from 22% a month earlier and lowered their economic growth outlook to 1.3% from 2.5%, a poll showed on Monday.

The poll of 52 analysts surveyed from May 29-31 came after investors dumped Argentine assets in May, weakening the peso by more than 17% in the month and causing the central bank to hike interest rates to 40%.

Analysts expect rates to stay at 40%, the highest in the world, until July and gradually fall to 30% by year-end. They also predicted that Argentina’s Peso, currently trading around 25 per dollar, would end the year at 27.4 per dollar.