Argentine government officials struck a confrontational tone
towards international financial institutions this weekend in
Washington a stance that is likely to be maintained at
least until the presidential elections in a years
Mercedes Marco del Pont, governor of Argentinas
central bank, said in Washington yesterday: They try to
make us believe that the policies that were at the roots of the
crisis are now part of the solution.
Her remarks reflect the poor relations between Argentina and
the international financial community, which seem to be nowhere
near normalization, several months after completing its debt
Current strong domestic growth may be derailed if current
Finance minister Amado Boudou has indicated Argentinas
willingness to reengage with international capital markets, and
several Argentine provinces have managed to do so recently in
recent weeks. But IMF officials have not learned of any
indication so far that Argentina is ready to meet the required
Indeed, president Cristina Fernandez de Kirchner made it
clear last week when she met German chancellor Angela Merkel
that her government would not accept a statutory IMF review
under the Funds Article 4, as a prelude to an agreement
with the Paris Club of creditors.
An IMF source told Emerging Markets: They are
trying to make a lot of noise about reaching an agreement
without the IMF, but it seems that the Paris Club has not
actually agreed to change its rules.
Alejandro Vanoli, head of the local securities exchange
commission, recently suggested that Argentina was ready to
release some information to the G20, but not to the IMF.
Nicolas Eyzaguirre, the IMFs Western hemisphere
director, said: We have not had any news about the
Article 4 consultation. In our talks with the Argentine
authorities ... it is constantly excluded, and our discussion
on economic development is as well.
Furthermore, the IMF has been increasingly critical of the
reliability of Argentinas statistics. Eyzaguirre has
reported discrepancies between the public and private
estimates, both in terms of inflation and more recently in
terms of the geographic gross product.
Nevertheless, Eyzaguirre stated that domestic demand
is growing fast, especially in the south, given the traction of
high commodity crisis. ... The output is growing fast, way
faster than anticipated, but also public policy, fiscal and
monetary policy in our understanding is still on the [stimulus]
side. So it would be our advice that, as in other countries,
the degree of impulse of public policy should be moderated in
order to make growth more sustainable.
The IMF expects Argentina to post GDP growth of 7.5% this
year and some economists say that, although economic policy is
becoming increasingly unorthodox, the macro economic picture is
actually looking brighter.
Eduardo Levy-Yeyati, director of the Cippec think tank and a
former chief economist at the Argentine central bank, said:
The fundamentals have improved a lot. Financial accounts
are exceptionally good.
[Argentina] has one of the best profiles of the region
and they have better debt ratios [net debt to GDP is around 20%
of GDP]. This is a huge upside. However, this has come at the
expense of chronic inflation. Policies are not the most elegant
in the region, but they are delivering high growth.