Gita Gopinath, deputy managing director of the IMF, said that the drought in Argentina “has a very important impact on the economy.” For this reason, the IMF recognized that there should be some compensation in terms of the reserve objective, within the framework of the last revision of the goals of the program that is carried out with the international financial organization.

“Taking into account that the economic situation is very fragile in Argentina, the program must serve as an anchor to reduce inflation, even if it is at a slow pace. To make sure you’re going in the right direction, to make sure the parallel market exchange rate isn’t too far off from the official exchange rate. All of this requires confidence that there will be sufficient reserves and that fiscal policy will remain consistent with reducing inflation, which requires strong measures on the spending side to contain fiscal spending,” he said.

“It is a very difficult situation in which the country finds itself. There is a shared understanding with the authorities that even greater efforts are required in order to have a good macro environment. Being able to have a consistent fiscal policy, monetary policy, and exchange rate policy that can contribute to reducing inflation and avoiding large disruptions in the domestic bond market,” he said, adding: “We will continue to work closely with the authorities and see what is needed in terms of stronger policies in order to move towards greater macro stability.”

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Likewise, Kristalina Georgieva highlighted the “prudent macroeconomic management” that the Argentine Ministry of Economy has been carrying out since the assumption of Sergio Massa and that originally contributed to the drop in inflation levels.

“We just completed the fourth review of the program for Argentina on March 31 and dispersed around $5.4 billion. If I take a step back and look at the changes over time, I would say that in the second half of the year, thanks to prudent macroeconomic management, we started to see inflation come down. But then, at the beginning of the year, the country is hit by a severe drought. This is a fundamental change, a huge shock to the system. At the same time, there have been policy setbacks,” the economist acknowledged.