IMF’s number two says Milei’s economic plan shows ‘progress,’ warns of social costs

Gita Gopinath stated that social and political support were ‘crucial’ in order to guarantee the durability of economic reforms

IMF First Deputy Managing Director Gita Gopinath said that President Milei’s economic plan has shown “progress” in achieving macroeconomic stability, but warned that it was necessary to guarantee that the burden of the austerity measures did not fall disproportionately on the backs of working class families. 

“Given the costs of a short term stabilization program, it is crucial to support the most vulnerable segments of society and ensure that the real value of social welfare programs and pensions are maintained,” she added in a statement published after her two-day trip to Argentina. 

Gopinath also stated that the road to recovery is still challenging and that a consistent monetary and exchange policy are required in order to reduce inflation and restock the country’s reserves. 

“It must be done in a pragmatic way in order to secure social and political support, which are crucial in guaranteeing the durability and efficacy of [economic] reforms.”

The IMF official met with numerous sectors during her visit to Buenos Aires. In addition to meetings with Milei, Economy Minister Luis Caputo, and Central Bank head Santiago Bausili, she also got together with academics, businesspeople, and union leaders to discuss the progress and effects of the government’s economic plan.  

“I have heard proposals on how to best tackle the challenges the country is facing and make the most of its enormous potential from a broad range of actors,” she said, adding that they all acknowledged that Argentina needed market reforms but that these needed to be done in a way that would ensure sustained and constant growth. 

International Relations Secretary of the General Confederation of Labor (CGT, for its Spanish initials) Gerardo Martínez was one of those who met with Gopinath. After their meeting, he said that the central union’s goal was to inform the IMF official of their “concern” over the impact the government’s economic measures are having on labor. 

“All we are seeing are vast measures of fiscal austerity. There are no measures to address income, which has an impact on economic activity,” he said to news agency Télam. The Center of Argentine Political Economy (CEPA) calculated that the government accomplished the fiscal surplus by cutting 39% of state expenditure, which they considered “unprecedented in recent years” in a recent report.

Social benefits and retirement pensions saw the deepest cuts, falling by 29% and 38% respectively.


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