Kristalina Georgieva, the International Monetary Fund’s managing director urged Argentine voters to back the government of Javier Milei during the country’s mid-term legislative elections in October, in a rare example of the multilateral lender weighing into local politics.
“The country is going to go to elections in October and it is very important that they don’t derail the will for change,” she said at a press conference Thursday during the IMF’s Spring Meetings in Washington, DC. “So far, we don’t see that risk materializing, but I would urge Argentina: stay the course.”
Georgieva’s comments, which come after the Fund granted a $20 billion loan to Javier Milei’s right-wing government earlier this month, were derided by the opposition newspaper Pagina 12, which said the her remarks smacked of political interference.
“This revealed the organization’s interference in the campaign for the upcoming legislative elections and, of course, in favor” of the Milei administration, the newspaper said on its website. It added that Georgieva was reading from “Milei’s and Caputo’s script,” in reference to the country’s economy minister.
The opposition Peronist movement, which has dominated Argentine politics for decades, has vowed to “ignore” the conditions of the IMF loan program if it returns to power.
“THIS TIME IS DIFFERENT”
At Thursdays event, Georgieva spoke enthusiastically in favor of the sweeping reforms that have been enacted by Milei’s administration since he took office in late 2023 and which have raised hopes the country will avoid the backsliding that followed previous IMF bailouts.
“Argentina has demonstrated that this time it is different,” she said. “This time, there is decisiveness to put the economy on the sound track: from high deficits to surplus, from double-digit inflation to inflation that dipped under 3% in February, from poverty over 50% to now around 37% — still very high but going down.”
Georgieva also praised Milei’s liberal policies. “The state is stepping out from where it does not belong to allow more dynamism in the private sector.”
She said Argentina is “not alone” in its macroeconomic-stabilization efforts.
“We are there. The World Bank is there. Inter-American Development Bank is stepping up,” she said.
US CRITIQUE
The IMF chief also responded to criticism of the institution by US Treasury Secretary Scott Bessent, who said on Wednesday that the Fund and the World Bank were failing to deliver on their core mandates and should spend less time on climate and other issues.
Georgieva said the lender can help countries that are hit by climate-related events to become more resilient to shocks.
“When we have, for example, Caribbean countries that are wiped out by extreme weather events regularly, naturally they are very concerned about that, and they say how can we be more resilient to these shocks? Again, we focus on balance of payments. What are the risks and what can be done to protect the balance of payments in these countries?” she said.
“Our job is to say, ok , if you are Dominica and a hurricane can wipe out the equivalent of 200% of your GDP, what are reasonable policies to put in place (…). In the case of Barbados, we came up with creating an additional buffer for them that would actually prevent a balance of payments shock from derailing the economic development of the country,” she added.