IMF urges Milei to shield the poor amid harsh austerity measures
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Protests recently erupted around Argentina demanding food aid for the poor in reaction to President Javier Milei's strict austerity policies.
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Agustin Caramano, a homeless Argentinian man, sleeps in front of a Catholic institution in Buenos Aires, Argentina on February 18, 2024. (AP)
The International Monetary Fund has encouraged Argentine President Javier Milei's government to protect the poor as he pursues hard austerity measures to reduce government expenditure, according to an interview released Sunday.
While the IMF applauded Milei's administration for attempting to balance the budget after years of overspending, his extreme measures have resulted in strikes and highlighted fears about rising hunger.
Milei, who assumed office in December amid public outrage over decades of economic mismanagement, had cautioned that Argentina's struggle with inflation was ongoing.
Gita Gopinath, deputy managing director of the IMF, told La Nacion daily that the economy in Argentina was near crisis before Milei and required "bold and decisive action" but warned that austerity measures must be "calibrated to ensure that social assistance continues to be provided and that the burden does not fall entirely on the poorest groups."
Protests erupted around Argentina demanding food aid for the poor in reaction to the negative impacts of increasing prices and the adoption of President Javier Milei's strict austerity policies.
Last week, Gopinath visited Buenos Aires to assess Argentina's $44 billion loan package, meeting President Milei, members of his cabinet, economists, union leaders, and civil society organizations. She called for implementing more social measures in order to be sure the fiscal deficit "does not fall on the vulnerable."
Gopinath predicted that Argentina's monthly inflation, which was at 20% in January, will fall to single digits by the middle of 2024.
She stated that the IMF considers the government's investment in human capital to be "critical", voicing that child poverty rates of more than 55% are deeply concerning.
"It is important to ensure that this percentage drops greatly and to be able to invest more in education."
Earlier this month, Milei's deeply controversial deregulatory reforms faced a major setback in parliament on February 6, when the package was blocked from advancing and was sent back for a rewrite, legislators said.
