The International Monetary Fund concluded their first consultation on Argentina’s economy in well over a decade last week. Before the consultation came to an end, an IMF official complimented the substantial reforms that Argentinian president Mauricio Macri has been rolling out.
It is not the first time that Argentina’s has been lauded under president Macri, the Inter-American Development Bank and US Treasurer Jack Lew have all been impressed by Argentina’s reforms and have been vocal on their support.
Alejandro Werner, director of the IMF’s Western Hemisphere Department said: “The changes to the macroeconomic, regulatory and business environment clearly have the characteristics to boost investments.”
Werner also assured that massive investment will come into Argentina in the years following the reform, albeit very slowly.
It is understandable that Macri’s free-market reforms, which ended a decade of left wing market policies from the Kirchner government, are drawing praise from these organizations, as they have all long supported moves towards the free market.
What is surprising however, is that organizations are so blindly supporting the Argentinian economy, where despite the reforms, the numbers are still grim.
Double-digit inflation is one of the concerns, although Macri’s policies have been targeting inflation relentlessly, the process of getting it back down into an acceptable percentile was bound to be long and arduous.
The other worrying number is related to poverty, which now reaches nearly a third of the Argentine population. The rise in poverty stems in part from Macri’s decision to lift the controls on the Argentinian Peso, which devalued the national currency.
Still, despite these shortcomings, international organizations such as the IMF will not think twice to vouch for Argentina, or any other country striving for free market reforms.