BUENOS AIRES, Argentina (AP) 鈥� Managing Director Kristalina Georgieva praised Argentine President Javier Milei鈥檚 austerity policies and reform agenda Monday, saying they have restored market confidence in a country long regarded as a on its sovereign debt.
Georgieva, the first IMF head to visit Buenos Aires in eight years, expressed confidence that Argentina could meet its debt obligations. As the fund鈥檚 largest debtor with about $58 billion in outstanding IMF loans, Argentina faces a key repayment period beginning next year, when Milei is expected to seek reelection.
鈥淎rgentina is in a much stronger position, and this is the result of the government鈥檚 hard work and the perseverance and sacrifice of the Argentine people,鈥� Georgieva said at a news conference alongside
Georgieva recalled that Argentina鈥檚 debt was among the first issues discussed when she took over as IMF managing director in 2019.
鈥淲e were debating whether the country would be able to keep up with servicing its debt obligations to everyone. That is not the question we should be asking today,鈥� she said.
Georgieva鈥檚 visit comes as has improved, with bond prices rising, central bank reserves increasing and inflation falling. Annual inflation has slowed to 33%, down sharply from 210% when Milei took office in late 2023. Last week, Moody鈥檚 upgraded Argentina鈥檚 sovereign credit rating, months after similar upgrades by S&P and Fitch.
鈥淲hat we have today is a much healthier picture,鈥� Georgieva said. 鈥淢arket confidence has returned.鈥�
Georgieva is scheduled to visit Vaca Muerta on Tuesday, one of the world鈥檚 largest reserves of unconventional oil and natural gas. Its development is expected to become one of Argentina鈥檚 main sources of foreign-currency earnings in the coming years.
Georgieva also said she sees no need for additional IMF disbursements before the 2027 presidential election.
鈥淲e may be on a good track for Argentina to join the club of emerging markets that have borrowed from the Fund, reformed their economies and borrowed no more,鈥� Georgieva said.
Investors are closely watching Argentina鈥檚 ability to meet its upcoming debt payments. The country will begin repaying principal on its IMF loans in September, adding to its interest payments, while its broader foreign-currency debt obligations are set to rise sharply in 2027.
Caputo has said the government expects to cover those payments with funding from multilateral lenders, proceeds from privatizations and domestic borrowing rather than by returning to international capital markets.
Despite the improving economic indicators, Milei has faced declining approval ratings as his austerity policies have coincided with weak consumer spending, stagnant wages, rising household debt and a modest increase in unemployment.
The president鈥檚 declining popularity has raised questions about his prospects for reelection in 2027 and increased investor uncertainty over whether his economic reforms would continue under a future administration.
Asked about that possibility, Georgieva acknowledged that these risks are best managed “by building strong policies during the time we have now … policies that inspire confidence among the people of the country and the international community.鈥�
Georgieva also said Argentina still has work to do in areas including construction, expanding credit for small businesses and mortgages, and reducing informal employment.
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