MercoPress. South Atlantic News Agency

IDB announces loans for Argentina

A lasting transformation would hinge on the private sector creating jobs, Goldfajn explained

Argentina's administration of President Javier Milei will be receiving loans worth US$ 3.8 billion from the Inter-American Development Bank (IDB), it was reported during the weekend. These funds will be allocated to various projects, energy subsidies, and social plans, it was explained.

On one hand, US$2.4 billion will go to the public sector this year while US$1.4 billion to be disbursed over the next two years will be for various private agribusiness, infrastructure, energy, and mining projects, including three of them regarding lithium, IDB CEO Ilan Goldfajn wrote in the Financial Times Sunday, in which he highlighted the economic achievements of Milei's Argentina.

The Brazilian-Israel Goldfajn also stressed the importance of joint work between the public and private sectors for better investment conditions. Goldfajn argued that to leave behind the country's recurrent crises, “a more efficient public sector and a dynamic private sector that generates opportunities and serves as an engine of growth” were required.

He also praised Milei's Government for “taking decisive steps in this direction: in only seven months it has achieved remarkable progress in restoring the much needed fiscal balance, going from a deficit of 2.9% of GDP at the end of 2023 to a surplus of 1.5% at the end of August this year.”

Goldfajn found it necessary to continue along these lines and deepen the optimization of public spending. “It is of the utmost importance to continue improving the efficiency of spending and redirecting resources to better help the most vulnerable Argentines,” he stressed while insisting that the IDB was “working closely with the Government to improve the efficiency of spending and strengthen social protection,” which was nevertheless only a “part of the story” to improve the Argentine economy.

A lasting transformation would hinge on the private sector creating jobs and the public sector providing fine-tuned regulation and strong social protection to create a cycle of stability and sustained growth.

Goldfajn also highlighted the deregulation under Milei, which together with a favorable business climate, would allow greater dynamism.