The Milei administration should “stress quality, not quantity” of fiscal adjustment in Argentina, the International Monetary Fund’s (IMF) western hemisphere director Rodrigo Valdés said. He added that they were impressed by the government’s results, but highlighted that it is “very important to keep improving the quality of fiscal adjustment.”

Valdés recognized that the government aims to create a more open and market-oriented economy in 2024. However, he highlighted the need for the government to support the vulnerable, so that “the burden of the adjustment does not fall disproportionately on working families.”

Valdés, a Chilean economist who is responsible for the IMF’s program in Argentina, was speaking at the IEFA Latam Forum. The event took place on Tuesday at the Four Seasons Hotel in Buenos Aires. 

The conference was not connected with the IMF’s program in Argentina. However, Valdes described the fund’s engagement with the authorities as “deep and constructive.” He added that they “focus on technical aspects, on designing policies to durably restore macroeconomic stability in Argentina.”

On a regional level, Valdés — a former Finance Minister in Chile — said that Latin America is facing high levels of debt, which pre-date the COVID-19 pandemic, and called for countries to implement austerity.

He also highlighted the question of how to accelerate growth. “We have to work on this extensively,” he said. “We have an economy that has lower capacity to grow than before.”

“These two challenges happen in a world that is more complex,” Valdés claimed. He added that the current global situation is marked by a variety of political tensions, higher interest rates and greater public debt. 

To overcome these challenges and accelerate growth, “we have to double the effort,” he said.