IMF backs Milei government measures to boost growth, domestic demand

The International Monetary Fund (IMF) has endorsed measures proposed by Argentina's government led by President Javier Milei to stimulate economic growth and job creation, according to a spokesperson for the institution. Julie Kozack, the IMF's spokesperson, made these remarks during her regular press briefing on Thursday, just two days after the IMF approved the third review of the agreement signed under Milei's administration.

The IMF's Executive Board is set to officially approve the additional funding in early December, which will release a further US$900 million under the program first agreed upon in April 2024. Since Milei assumed office in December 2023, Argentina has received a total of nearly US$18 billion in IMF support, including disbursements from the 2018 agreement and the renegotiated program in 2025 totaling US$20 billion.

Kozack outlined four specific measures the government has pledged to implement to broaden the benefits of Argentina's recent stabilization efforts: deepening the country's capital and mortgage markets to facilitate private investment and boost domestic demand; enhancing labor market flexibility to encourage job creation; progressing with infrastructure concessions awarded recently; and facilitating strategic investments through the Large Investment Incentive Regime (Régimen de Incentivo a las Grandes Inversiones or RIGI).

While the IMF remains committed to Argentina's strong macroeconomic policies, Kozack emphasized the importance of expanding these gains to enhance growth and employment opportunities in the country.

Regarding Argentina's rising country risk rating, Kozack stated that while she could not predict future developments, the IMF advised Argentina to stay on course with its policy implementation and continue executing the program successfully. She highlighted the accumulation of international reserves and improvements in the country's external position as crucial steps to reduce the risk premium.

Argentina's country risk has surged from around 400 basis points in July to approximately 740 basis points, primarily due to investor concerns about the Milei administration's ability to meet external debt obligations, including US$12 billion owed to private bondholders and US$7.5 billion due to the IMF by 2027.