The International Monetary Fund (IMF) will not negotiate a loan programme with Argentina because “Argentina did not ask for one”, the IMF’s managing director Christine Lagarde said Thursday.
Lagarde is in Buenos Aires for Monday's G20 gathering of finance ministers. She is scheduled to meet a number of high-ranking Argentine government and Central Bank officials, including President Mauricio Macri.
The Macri government “is not brutally attacking the deficit rather it is contemplating the capacity of the Argentine economy and its people to respond”, she said during a presentation at the Torcuato Di Tella University alongside Treasury Minister Nicolás Dujovne.
“The orthodoxy might argue that it would be better to reduce it much faster”, Lagarde said, “but while there is determination and will, a reduction of one point of the the primary fiscal deficit would also be a big achievement”, she added.
Lagarde denied rumours her visit, the first by an IMF chief in 15 years, was aimed at negotiating a loan programme for Argentina.
“I’m not here to negotiate a programme and I’m not coming to lend money because Argentina did not ask for it”, she commented.
The IMF has high hopes for Argentina. In late December, the international financial institution said it forsaw Argentina’s economy “slowly pick(ing) up in the coming years”.
In a report outlining its forecast for the country’s economic future, the IMF predicted a growth rate of 2.5 for 2018, one percentage-point less than the government’s own forecast in next year’s budget.
“The government has unwound multiple distortions and made important progress in restoring integrity and transparency in public sector operations,” it said in the 2017 Article IV report prepared in consultation with the national government from early December.
It also raised its outlook for the country's current account deficit to 4.3 percent of GDP in 2017 and 4.4 percent in 2018, from a previous 3.6 percent and 3.7 percent respectively.