Monday, May 16

Agreement with the IMF: Is it good or bad for economists?


Emanuel Alvarez Agis

The former Vice Minister of Economy and director of the consulting firm PxQ, Emanuel Álvarez Agis, assured in radio statements that the agreement is “surprisingly good” since it does not contain structural reforms, and promotes public works, without adjustment, as was traditional in the institution programs.

“I am very surprised. I expected a classic agreement with structural reform and low spending,” he said in dialogue with El Destape.

Naomi Brenta

The doctor in economics and researcher on issues related to the IMF, Noemí Brenta, stressed that the agreement “decompresses the current situation of enormous uncertainty” and that “it is reasonable.”

“Given the correlation of power between Argentina and the great Western powers, it was what could be achieved,” he said on FM 97UNE radio, although he warned that this does not imply that Argentina will jump to development immediately.

Pablo Bortz

Pablo Bortz, an economist, researcher at Conicet and co-director of the Master’s in Economic Development at UNSAM, valued reaching an agreement since the default “implied the fall of all official financing (IDB, CAF, etc.), zero financing for a huge number of projects, and probably worsened the external profile/foreign exchange gaps”.

Regarding the points made by the Government, Bortz highlighted as positive that an extended facilities agreement (EFF) has been achieved without pension and labor reform, as usually happens with this type of pact.

In his twitter account, the specialist emphasized the importance of regaining access to credit to finance investments and to “roll” debt maturities, albeit with financial account regulations. In addition, he underlined the importance of strengthening the debt market in local currency, one of Minister Guzmán’s objectives.

Martin Kalos

The director of the consulting firm EPyCA, Martín Kalos, said that the agreement “took too long” but represents a “point for the government.”

Regarding the deficit goals, which would drop to 0.9% (of GDP) in 2024, the economist sees it as “basically feasible if energy subsidies are reduced, which would also be logical and reasonable.”

However, Kalos considers that there are some objectives proposed by the Government that are difficult to meet in this context. “How do you accumulate $5 billion in Reserves this year, sustaining current policies?” he asked.

Guido Lorenzo

For his part, the director of the consulting firm LCG, Guido Lorenzo, said that the government and the IMF “kicked the ball forward.”

The professor at the UBA clarified that the agreement implies that the organization “refinances the maturities for two and a half years subject to you complying with 10 quarterly reviews,” but then “you should pay $44.5 billion in the following 6/7 years”. In that sense, he estimates that the reforms “will be agreed with the next government.”

Lorenzo asserted that the requests in fiscal, monetary and reserve matters were to be expected and highlighted as the most novel thing that part of the amount that the IMF will disburse during the term of the agreement “had been paid with SDRs, so perhaps there will be a positive net financing for some $4.5 billion (unclear).”

Andrés Asiain

Finally, who was very critical of the agreement was Andrés Asiain, Director of the Scalabrini Ortiz Center for Economic and Social Studies (CESO).

“A disbursement scheme that does not reinforce reserves and has us tied to periodic reviews to avoid default, does not generate economic stability and condemns us to the tutelage of the IMF. I hope I am wrong, but I think we are shooting ourselves in the foot,” he said.



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