The International Monetary Fund (IMF) said that President Javier Milei’s administration has brought favorable results for the country through the program agreed upon with the lender but warned about “a number of challenges.”

“Program implementation has resulted in a sizable reduction in inflation and fiscal deficit. There are also signs of a nascent recovery in activity and real wages,” IMF spokesperson Julie Kozack said in her usual press conference.

However, she said that the Fund “consistently recognized the very delicate social situation” the country is currently undergoing. This has been reflected in the recently published poverty rates, which revealed that 53% of Argentines are poor, an 11-point surge since Milei took office.

“Addressing these high rates of poverty and ensuring that growth is more inclusive remains a priority for the authorities, who are continuing to take steps to protect the most vulnerable,” Kozack explained, saying that social assistance programs that benefit “poor women and children” have been expanded. 

She also said that the government’s actions “to bring down inflation and reforms to encourage employment and investment should lead to a further improvement in real wages and economic activity going forward.” The country’s GDP has dropped and unemployment has grown significantly since Milei took office. 

Kozack declined to comment on whether the country and the lender have reached an agreement regarding a new program given that the current Extended Fund Facility (EFF) signed in 2022 ends in November this year.

“Technical discussions are ongoing in the context of the current EFF program, and we’ll provide more information on those discussions when we’re in a position to do so,” she said.

Kozack also declined to speak about the country’s international reserve accumulation target. After closing September practically even, the Central Bank started October by buying U.S. dollars. Net international reserves, however, are still around negative US$5 billion.

“What I can say is that the team is starting to assess compliance with the end September targets, — both on the fiscal side and on the reserve side,” she said. “This technical work is continuing, and it would therefore be premature for me to comment further on this issue.”