BUENOS AIRES (CN) — President Javier Milei received a vote of growing confidence in Argentina’s economic turnaround under his controversial programs as IMF Managing Director Kristalina Georgieva struck an upbeat tone during her first official visit to the country this week.
“Argentina is in a much stronger position, and this is the result of the government’s hard work and the perseverance and sacrifice of the Argentine people,” the International Monetary Fund chief said at a news conference with Economy Minister Luis Caputo Monday.
The optimism comes at a pivotal moment for Argentina’s libertarian government, one year before the next presidential election. Milei, a right-wing libertarian with close ties to President Donald Trump, took office in 2023 pledging to slash public spending, privatize the economy and tame the long-standing inflation crisis. His promises — and, to some extent, his ability to deliver — captured the attention of global markets and mainstream economists, who viewed his economic program as radical but potentially promising.
But critics argue his policies have come at a high cost and his reelection isn’t guaranteed. Since Milei took office, formal employment has fallen by more than 100,000 registered private-sector jobs. Household debt has increased as Argentines rely more on credit to cope with declining incomes. Public subsidies for energy and transportation have been reduced, and electricity and natural gas rates have risen by several hundred percent in many cases.
Estimates from the Observatorio de la Deuda Social Argentina at the Universidad Católica Argentina and other research groups indicate purchasing power fell sharply during the first months of Milei’s administration, with real wages losing about 15% to 20% of their value between late 2023 and early 2024 before beginning to recover.
Speaking with Caputo at a news conference in Buenos Aires, Georgieva acknowledged the challenges Argentines face but said she did not “foresee the need for Argentina to go to the fund for additional financing.” She said the country was on a “good track” to join the group of nations that “borrowed from the fund, reformed their economies, and borrowed no more,” before turning to the audience with a challenge: “Are you guys ready for it? … It’s not going to be me; it’s you. Can you persevere to do it?”
Georgieva’s visit drew protests from labor unions. Members of the state workers union ATE placed signs outside the Economy Ministry denouncing what they described as “eight years of austerity” tied to IMF-backed policies. The signs blamed the fund for spending cuts under former presidents Mauricio Macri and Alberto Fernández, as well as Milei. They said public-sector wages lost about half of their purchasing power since Argentina signed its first IMF agreement in 2018.
Argentina remains the IMF’s largest borrower, with about $57.7 billion in outstanding credit, much of it stemming from the 2018 program. That agreement was later refinanced before Milei negotiated a new $20 billion arrangement last year.
The two-day visit, ahead of a key IMF review in September, included meetings with Milei, Caputo, Central Bank Governor Santiago Bausili and other senior officials, as well as academics, students and business leaders. Georgieva also traveled to Vaca Muerta, Argentina’s vast shale formation, underscoring the government’s hopes that expanding energy exports will help cement the economic recovery. The visit marked the first by an IMF managing director to Buenos Aires since Christine Lagarde’s 2018 trip, shortly after the fund approved the record bailout.
Héctor Torres, a former executive director at the International Monetary Fund, said Georgieva’s visit was best understood as a political gesture rather than a technical mission. IMF managing directors do not typically travel for technical discussions, he said, leaving those responsibilities to staff.
He described Argentina’s relationship with the IMF as “very good,” arguing the government has pursued a fiscal adjustment even more ambitious than the fund expected, with strong backing from the U.S. Treasury.
Torres said Georgieva’s visit to Vaca Muerta carried “high symbolism,” directing the attention of investors and the media toward what he called Argentina’s new “foreign exchange-generating engine.” He also rejected the idea that Milei’s fiscal austerity was driven by pressure from the IMF or financial markets. Instead, he said, it reflects Milei’s own convictions: “He promised it during his campaign, and he’s implementing it as president.”
Torres said the future of the relationship would depend largely on who wins Argentina’s 2027 presidential election and whether the next administration chooses to continue Milei’s economic agenda.
Argentina’s relationship with the International Monetary Fund has long been among the institution’s most contentious. The IMF became a central target of public anger during the country’s devastating 2001 economic collapse, with many Argentines blaming the fund for policies that ended in default, recession and social unrest.
In 2006, then-President Néstor Kirchner sought to sever that relationship by paying off Argentina’s outstanding IMF debt in full, arguing the move would restore economic sovereignty. More than a decade later, Argentina returned to the Fund under Macri, whose government secured a record $57 billion rescue package in 2018 as investors fled Argentine assets and the peso plunged.
The IMF has remained a dominant force in Argentine economic policy ever since, though the relationship has evolved sharply under Milei. His government has embraced an aggressive fiscal adjustment that IMF officials have repeatedly praised, making the current relationship one of the closest in decades.
On the political left, however, the fund remains deeply divisive. Opposition lawmakers and activists have repeatedly argued the Macri-era borrowing was illegal and have sought to repudiate or invalidate the debt, contending it violated Argentine law and IMF rules. Those efforts have gained little traction, and successive governments — including the current one — have continued negotiating with the fund rather than attempting to walk away from their obligations.
Lucía Cholakian Herrera is a Courthouse News correspondent covering Latin America. She is based in Buenos Aires, Argentina.
Subscribe to our free newsletters
Our weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.
