Now, the IMF is happy. It finally disbursed US$800 million from the eighth review of the debt agreement. Not coincidentally, it released the money after the Base Law was approved, although shortened. And if they are happy, it can’t be any good for us. The IMF did not refrain from asking for more adjustment in return and made new demands.


Set the date, the IMF said, not to the CGT to call for a strike, obviously, but to Milei to lift the restrictions and eliminate the country tax before the end of the year. In other words, it demands that the peso be devalued. This would further heat up inflation. In addition, he asked to eliminate the preferential dollar that exporters have, and said that this had to be towards the end of June, that is, now.

In response, exporters who have been holding back the liquidation of agriculture also ask for devaluation. Luis Caputo had said that he was not going to change any of that, we will see what they do, but let’s say that the government does not have many principles.

More fiscal adjustment

The IMF told Milei that everything was fine with the inflation blender and congratulated him on the brutal tax cut, but said that it was necessary to “improve the quality of the adjustment.” What does that mean? that it is not enough and they want more. They ask to eliminate subsidies on energy rates before the end of the year and lower public transport subsidies to 0.1% of GDP. That comes hand in hand with higher rates.

Restitution of Income Tax

The statement calls for “continuing efforts to reform the personal income tax”, that is, the salary tax. One of the points in which the government had a setback in Congress.


And on top of that, they don’t want to take care of the mess that their own recipes are leaving behind. They have already realized that the recession for this year is going to be worse than they anticipated, lowering the forecast from a fall from 2.8% to 3.5% of GDP. And if the agricultural sector is excluded, the drop in 2024 will be 6%.

We are already experiencing the consequences of the IMF regime: an increase in poverty by more than 11 million people since 2018 and 3 million in recent months. With the debt mechanism, the Fund seeks to impose increasingly worse working and living conditions for the working majority, and favor large businessmen. Nothing good can come from your recipes.


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