Washington, June 25 (IANS) The International Monetary Fund (IMF) on Thursday said Argentina has continued to make “important progress” in restoring macroeconomic stability, with growth strengthening, inflation declining, and financing conditions improving, while expressing confidence that the country will continue to meet its obligations to the Fund.
Speaking at a regular IMF press briefing, Julie Kozack, Director of the IMF’s Communications Department, said Argentina’s economic reforms were beginning to produce tangible results.
“I just want to continue to recognise that Argentina is continuing to make important progress in restoring macroeconomic stability, in strengthening the country’s economic resilience, and creating a more open and efficient economy,” Kozack said.
“Growth has continued, inflation is falling, international reserves are being rebuilt, and financing conditions have continued to improve for Argentina.”
Responding to questions about Argentina’s financing needs and access to international markets, Kozack said market conditions had improved considerably but stressed that decisions on future borrowing rested with the government.
“What we’ve seen is that they have improved considerably. Sovereign spreads have narrowed significantly in Argentina. They’re now below 450 basis points. Market sentiment for Argentina has become more favourable,” she said.
Kozack said the improvement reflected upgrades by two credit rating agencies as well as the authorities’ policy efforts.
“But I also want to say that decisions regarding the timing and the terms of market access are ultimately decisions to be made by the authorities,” she said.
The IMF also welcomed support from other international financial institutions, saying cooperation with the World Bank and the Inter-American Development Bank could strengthen investor confidence.
“We recognise the important catalytic role that international financial institutions and multilateral development banks can play in supporting countries’ financing strategies and their reform agendas,” Kozack said.
She said such support could “reinforce confidence”, “improve financing conditions”, strengthen external resilience and facilitate “a gradual and sustainable return to market financing”.
On labour market reforms, Kozack said one of the IMF-supported programme’s objectives was to encourage greater formal employment, although the impact of recent reforms would take time to become visible.
“Formalisation depends on a number of different factors. It includes not only macroeconomic outcomes, but also the tax and the regulatory structure, which include rigidities in the labour market, and no single indicator can really capture the extent of formalisation,” she said.
She added that the recently enacted labour reforms were still new and “the effects of these kinds of reforms take time to emerge”.
Asked about concerns over Argentina’s ability to repay IMF loans, Kozack dismissed suggestions that the Fund had doubts over future repayments.
“I would just point out that Argentina has made all of its payments to the Fund, and we are confident that they will continue to do so. We don’t have any concerns there,” she said.
Argentina has been implementing sweeping economic reforms aimed at reducing inflation, restoring fiscal discipline and rebuilding investor confidence. The country remains the IMF’s largest borrower under its existing financing arrangements and continues to work closely with the Fund as it pursues macroeconomic stabilisation.
–IANS
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