Waiting for the IMF and the Article IV

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Waiting for the IMF and the Article IV

Agosto 2016

What will the IMF find when it arrives next month to conduct the first article IV review in a decade? Argentina is an economy that is still suffering from the large external and fiscal imbalances inherited from the Kirchner administration, from the large distortions in relative prices that are extremely costly to correct, while it is struggling to reduce inflation and reignite growth.

It seems clear that the Macri administration is making efforts to put the country back on track, as is trying to correct a period of high-chronic inflation, large fiscal deficits, an overvalued currency accompanied by a buoyant parallel foreign exchange market, low foreign reserves and capital controls. So far there were quick successes in unifying the exchange rate market and in eliminating controls as well as in reaching a deal with the holdouts.  There has been less success in reducing the fiscal deficit and the country is still struggling to contain inflation and reignite growth.