The International Monetary Fund (IMF) published its latest World Economic Outlook on Tuesday predicting a 149.4% inflation rate and a 2.8% GDP drop for Argentina.

Pierre-Olivier Gourinchas, the Fund’s chief economist, celebrated President Javier Milei’s harsh austerity measures. “The progress so far has been really impressive,” he said in a press conference on Tuesday. “The authorities have been able to record a fiscal surplus for the first time in over a decade.” Roughly one-third of the money saved by the government was from slashing pensions, private reports have found.

“The authorities are implementing a very ambitious stabilization plan to restore macroeconomic stability,” he said, adding that the program consists of “a strong fiscal anchor” and the central bank eliminating its government financing. He said the latter was one of the factors leading to “very elevated inflation numbers” during the previous administration.

“That is already showing its effects,” Gourinchas said. “We see this sharp decline in month‑on‑month inflation.” The inflation rate for March marked the third monthly decrease in a row after it hit 25.5% in December, the highest since February 1991. Cumulative inflation for the first three months of the year reached 51.6%. 

However, Gourinchas warned that the plan will take time and “steadfast policy implementation” before it shows results, although he stressed that progress has been “sharp.”

Asked about whether the recovery would be “in L, V, or U shape” — referring to the speed of the bounceback — he said that he would prefer “V over U over L”.

These assessments came one day before Economy Minister Luis Caputo’s trip to the IMF’s and the World Bank’s Spring Meetings in Washington D.C. Together with Finance Secretary Pablo Quirno, Caputo is scheduled to meet with representatives of the IMF and the U.S. Treasury.

Argentine media outlets have reported on possible negotiations for a new program with the Fund with fresh disbursements. However, two weeks ago the Fund’s communications director, Julie Kozack said discussing it would be “premature”.