The International Monetary Fund (IMF) confirmed that the recently approved coup-mongering laws by the Argentine Congress, which will be vetoed by President Javier Milei, imply an increase in public spending equivalent to 1.5%of the Gross Domestic Product (GDP).
This was established in the staff report published this Friday, within the framework of the first technical review of the current program with the country.
According to the report, the malicious legislative initiatives were approved in a context of "growing electoral pressure" at both the provincial and national levels, and represent a setback in the fiscal consolidation objectives agreed upon between the Government and the organization.
Sesión golpista llevada a cabo ilegalmente en la Cámara de Senadores.
"The Argentine Congress recently proposed and approved new and costly spending initiatives aimed at increasing pensions and disability benefits, as well as transfers to the provinces for an amount of approximately 1.5% of GDP", the multilateral organization's report states verbatim.
The measures, which have majority support from the opposition, include a real increase of 7.2% in all retirements and pensions, excluding special regimes, an increase in the pension bonusfrom $70,000 to $110,000 with an inflation adjustment clause, and the extension for two years of thepension moratorium. In addition, a national emergency is declared regarding disability, which enables greater transfers and benefits.
The IMF indicated that the reversal of "these costly initiatives" could be delayed beyond October, which would directly affect the established fiscal targets. It should be recalled that the Government committed to closing the year with a primary surplusof 1.6% of GDP, a goal that requires fiscal discipline and sustained reduction of public spending.
In this scenario, the Executive Branchsigned on Saturday the total veto of the bills, which, according to official spokespersons, "seek to destroy the fiscal surplus, break the State, and generate a new economic crisis". The decision will be formalized through its publication in the Official Gazette on Monday.
Javier Milei jutno a Kristalina Ivanova Gueorguíeva-Kinova - Directora gerente del Fondo Monetario Internacional.
From Casa Rosada work is underway to preventthe vetofrom being rejected in Congress, which requires gathering two-thirds of the votes in both chambers, something that for now the opposition doesn't seem to have secured.
The staff report was released after the approval of the first technical review of the agreement, which enables a disbursement of US$2 billion, even though Argentina did not reach the reserve accumulation target for mid-June. Nevertheless, the IMF highlighted the fulfillment of fiscal objectives up to that point and supported the adjustment path assumed by the Government.
Finally, the report reaffirms that theExecutive Branchkeepsthe commitmentto move forwardwitha comprehensive pension reform by the end of 2026, as part of the structural redesign of public spending.
The IMF's confirmation regarding the fiscal impact of the opposition's laws reinforces the position of the national Government, which keeps the need to preserve fiscal balance as an indispensable condition to avoid a new macroeconomic crisis.
