ZCZC
BCN-06
IMF-ARGENTINA-ECONOMY-INFLATION
Lagarde: Argentina crisis would have been much worse without IMF
WASHINGTON, Sept 20, 2019 (BSS/AFP) – The crisis hammering Argentina would
have been much worse had the International Monetary Fund not stepped in with
a massive rescue program, outgoing IMF chief Christine Lagarde said Thursday.
“I look at Argentina when it came knocking on the door and it was in a
tough place, and we were the only game in town,” Lagarde told AFP in an
interview.
But she said she regretted that the record $57 billion loan from the
Washington-based crisis lender was not able to bring down the country’s
soaring inflation rate.
The fund has a responsibility to help a member country and even if “there
was a small percentage of chance that it would succeed, our job is to do it.
And that’s what we did.”
Some critics have chastised the IMF, and Lagarde, for once again providing
huge amounts of financing for Buenos Aires, only to see the familiar pattern
experienced in prior crises of failed or delayed reforms and soaring
inflation.
Lagarde acknowledged that Argentina is “clearly in a difficult situation at
the moment,” but said the IMF program managed to stabilize the situation for
a time, even though inflation remained a “sore point.”
“What would have happened had we had we not been there, had we done
nothing,” she said, “I think it would have been a lot worse. There’s no
question in my mind about that.”
The government has received about $44 billion so far of the three-year loan
approved in June 2018 but soaring inflation and rising poverty stirred
outrage at the government’s belt-tightening measures.
Center-right, business-friendly President Mauricio Macri suffered a
stinging defeat in a primary election at the hands of populist challenger
Alberto Fernandez, which once again whipped up market volatility in the
recession-hit nation and undermined the currency.
Economy Minister Hernan Lacunza in late August asked the IMF to restructure
the country’s repayments, and announced initiatives to postpone debt service
to institutional investors, relieving the pressure on international reserves
so they can be used to stabilize the currency.
Lacunza, who has been in his post barely a month, is due to meet with IMF
officials in Washington in late September to discuss the status of the rescue
program.
BSS/AFP/HR/1020