The International Monetary Fund, IMF, admitted on Wednesday that it had underestimated the “incredibly complicated situation” of the Argentine economy and also that taming inflation had taken much longer than originally expected.
Speaking at the American Enterprise Institute in Washington, the executive director of IMF, Christina Lagarde said that nevertheless she remained hopefully and reasonably positive about the evolution of economic activity in Argentina, despite the production recession and drastic drop in consumer spending.
Ms. Lagarde also insisted that the implementation of the program agreed with the administration of president Mauricio Macri will end being a successful plan.
Argentina in two weeks time will be facing the first anniversary of the signing of the controversial credit support agreement with the IMF, nominally the highest in the history of the Fund, some US$ 57 billion.
The Argentine economic situation has proved to be incredibly complicated and I dare say that many of those involved, including us, underestimated a bit, when we started with the Argentine authorities building the program
As to inflation, Ms. Lagarde warned that instead of stabilizing and diminishing gradually as we had anticipated, it is showing more resistance than what we thought. Now it is beginning to decline, but at a much slower pace than we had anticipated, admitted the IMF chief.
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How candid of Christine! I am moved to tears.Jun 06th, 2019 - 07:25 pm 0
Let's see: Argentina would long be in default without the quick and unprecedented help of the IMF.
Not only that: the IMF even went against its own policies when it authorized Macri to use money from the loan to support the peso, even in the presence of significant capital flight.
All the evidence point to a clear intention to prop up the Macri government, first by helping the government avoid a terminal crisis, and second by giving it generous amounts so that the foreign debt could be serviced in time. Hey, what could be wrong with using some public money to ensure private creditors get their dues?
In any event, if will be interesting to see Lagarde's face if Macri loses the October election. Her IMF job should be at risk at the very least.
I've said it before so why not double down: The horrendous Argentina - IMF agreement will spell the end of Lagarde as its director and perhaps the end to the entire organisation itself. Good riddance.Jun 08th, 2019 - 03:43 pm 0
JBAJun 09th, 2019 - 03:27 am 0
I agree. Lagarde / IMF have played hard to support corrupt Macri and his merry gang of highway robbers. They have bent some of the basic rules that forbid using IMF loaned money to support a local currency when capital flight is rampant as is the case in Argentina. Mme Lagarde deserves to lose her job. However, some argue she just followed orders from Donald Trump, since the US is the most influential IMF member.