IMF Presses Argentina to Keep Cuts, Expand Private Role

The International Monetary Fund is urging Argentina’s government to keep its economic programme in place, including sharp public-spending cuts, while pushing for more private investment and a more flexible labour market. The call comes as the Argentine Industrial Union reports that about 90,000 jobs have disappeared since August 2023.

The programme, and who sets its terms

At a Thursday briefing in Washington, IMF spokeswoman Julie Kozack said strong policy implementation remains the best way to reduce country risk. She called the accumulation of net international reserves and a stronger external position “really fundamental.” “Our overall message on Argentina is really to stay the course with strong policies while broadening the benefits.”

The Fund’s four areas for action point toward deeper financial markets and a bigger role for private investment. They include deepening capital and mortgage markets, making labour markets more flexible, advancing infrastructure concessions and facilitating strategic investment under the Incentive Regime for Large Investments, or RIGI.

The IMF says these steps should widen access to financing and support private investment and domestic demand. It called Argentina’s macroeconomic performance “impressive,” pointing to sharp public-spending cuts and President Javier Milei’s government efforts to curb inflation and the fiscal deficit. Still, the Fund acknowledged how difficult it is to turn stabilization into jobs.

Jobs promised, jobs lost

Asked whether Argentina could face two consecutive quarters of economic contraction, Kozack said the Fund and the government shared “the importance of expanding the gains of stabilisation into stronger growth and job creation.” The UIA’s figure puts a hard number beside that goal: about 90,000 jobs have vanished since August 2023.

More than US$70 billion in projects had received approval under RIGI, the Buenos Aires Times reported. MercoPress put the approved total above US$76 billion, citing the Fund. The programme promises jobs and growth through strategic investment, infrastructure concessions and private financing. Yet workers have not seen those gains: reported job losses remain the measure of what stabilization has failed to deliver.

On Tuesday, IMF staff and Argentine authorities reached a staff-level agreement on the third review of the country’s four-year Extended Fund Facility programme. The IMF approved the US$20 billion programme in April 2025. The review could unlock a disbursement of about US$900 million, and the IMF Executive Board was expected to consider it in early December.

Targets backed by creditors

The agreement retains a primary-surplus target of 1.4% of GDP for 2026 and a similar effort for 2027, along with the exchange-rate band regime. In October, the IMF lowered its 2026 growth forecast for Argentina from 3.5% to 2.1%. MercoPress reported that media were warning of a possible technical recession.

MercoPress also reported that net reserves stood about US$4 billion above the June target, the Central Bank had bought nearly US$16 billion during the year, and the Treasury had raised more than US$5 billion in local markets. With backing from official creditors, the government secured US$3.2 billion in guaranteed international bank financing and was working on another US$1 billion before year-end.

Kozack said authorities remained firmly committed to a zero overall fiscal balance and had pledged to keep strengthening the monetary policy framework. She said that would support “remonetisation,” improve liquidity management and help direct credit more effectively. Her stated endpoint was stronger, more durable growth, built through policies and reforms that support investment, financing and job creation. The IMF’s conditions and targets are precise; the gains promised to workers remain undelivered.