IMF urges Milei to turn stabilisation gains into jobs and investment

The International Monetary Fund (IMF) has urged President Javier Milei's government in Argentina to turn its recent economic stabilisation gains into job creation and investment, according to Julie Kozack, the IMF's communications director. The IMF reached a technical agreement with Buenos Aires on the third review of Argentina's four-year lending programme, which would disburse approximately US$900 million.

Kozack emphasized the importance of expanding the stabilisation progress into stronger growth and job creation during a press briefing in Washington. While the IMF praised Argentina's macroeconomic performance, citing President Milei's government for its fiscal discipline and efforts to control inflation, the Fund highlighted the challenge of translating these gains into employment.

The UIA, a business association, reported that about 90,000 jobs were lost since August 2023. To address this, the IMF and the Argentine government agreed on four key areas for action: strengthening capital and mortgage markets, increasing labour market flexibility, advancing infrastructure concessions, and facilitating strategic investments under the RIGI investment incentive scheme.

Over US$70 billion in projects have been approved under this scheme. The IMF also stressed the need to continue building international reserves to improve Argentina's external position and reduce its country risk premium. The Argentine government has pledged to maintain a fiscal anchor of a zero overall balance and improve the monetary policy framework, supporting the "remonetisation" of the economy and effective credit allocation.

The IMF expects its Executive Board to consider the latest programme review in early December, which could unlock the additional US$900 million disbursement.