IMF urges Milei to turn stabilisation gains into jobs and investment

The IMF wants Argentina to move from stabilisation to broader economic growth. Lower inflation and a smaller fiscal deficit are important, but they do not by themselves guarantee more jobs or investment. The Fund says the next task is to spread the benefits of those gains through the economy.

The agreed priorities include deeper capital and mortgage markets, greater labour-market flexibility, progress on infrastructure concessions and support for strategic projects approved under the RIGI investment scheme. These measures could make financing easier, encourage businesses to invest and help private employers create jobs.

The challenge is urgent because the Argentine Industrial Union reported that about 90,000 jobs had been lost since August 2023. The IMF also wants Argentina to build international reserves and maintain a zero overall fiscal balance. Its message is to stay the course while making stabilisation produce stronger, more durable growth.

An Extended Fund Facility, or EFF, is an IMF lending arrangement for countries facing significant economic problems that require sustained policy changes. It normally links financing to reviews of agreed policies and targets. Argentina’s EFF provides a framework for stabilisation, fiscal management, monetary reform and broader economic changes.

The latest review is the programme’s third review. An IMF technical team reached a staff-level agreement with Buenos Aires, meaning officials agreed on the review’s findings and proposed next steps. The IMF Executive Board must still consider and approve the review before funds are released.

That decision matters because approval would unlock about US$900 million for Argentina. The review also reinforces the policy direction the IMF wants: a zero overall fiscal balance, stronger reserves, improved monetary policy, more investment and job creation. It therefore combines immediate financing with pressure to maintain reforms.

Argentina’s Extended Fund Facility is worth US$20 billion and runs for four years. That scale gives the programme major importance for the country’s financing and economic policy. It also means each review can affect Argentina’s access to additional IMF money and influence confidence in its reform programme.

The latest review is the third one under the arrangement. IMF technical staff reached a staff-level agreement with Buenos Aires, which clears an important procedural step. The proposed disbursement is about US$900 million. It is not automatic, because the IMF Executive Board must consider the review.

The Board is expected to examine it in early December. If approved, Argentina would receive the additional funding while continuing its fiscal and monetary commitments. The IMF also wants the government to use stabilisation as a base for investment, employment and stronger growth, rather than treating financial improvement as the final goal.

The IMF says stabilisation must be connected to policies that help businesses invest and hire. Its focus is not only on government finances or inflation. It wants reforms that improve how money reaches households and companies, how firms operate and how large projects move forward.

The first priority is deeper capital and mortgage markets, which could widen access to finance and support private investment and domestic demand. The others are more flexible labour markets, progress on recently awarded infrastructure concessions and help for strategic investments approved under the RIGI scheme. More than US$70 billion in projects has been approved under RIGI.

These policies are intended to strengthen growth and employment over time. The IMF also says Argentina should keep building international reserves, maintain a zero overall balance and improve monetary policy. Together, those steps could support liquidity, direct credit more effectively and reduce financial risks that discourage investment.

Reducing inflation and the fiscal deficit improves financial stability, but it does not instantly create jobs. Employment also depends on investment, access to credit, demand and business conditions. The article presents this as Argentina’s central next challenge: converting macroeconomic progress into activity that supports workers and companies.

The Argentine Industrial Union recently reported that about 90,000 jobs had been lost since August 2023. In response, the IMF highlighted labour-market flexibility, deeper finance markets, infrastructure concessions and RIGI-backed strategic investment. These policies are designed to encourage private firms to invest and hire.

The article does not identify one definitive reason for the job losses. It shows instead that stabilisation and employment have moved at different speeds. The IMF wants the government to preserve its fiscal and monetary policies while making reforms deliver stronger growth. That could improve job creation over time, but the Fund describes it as an ongoing task.

International reserves are assets held by a country’s monetary authorities that can help meet external payment needs. A stronger reserve position signals greater capacity to manage pressure from abroad. The IMF says Argentina should keep building reserves to strengthen its external position and help reduce its country-risk premium.

The country-risk premium is the extra return investors demand to lend to a country they view as risky. If that premium falls, borrowing can become less expensive and investment decisions can become easier. Reserves support confidence, while a lower risk premium can improve access to credit for the government and private sector.

The article links these conditions directly to Argentina’s investment challenge. The IMF wants better reserves alongside deeper capital markets, improved monetary policy and more effective credit allocation. These steps do not guarantee investment, but they can make financing more accessible and support the private projects and job creation the Fund is seeking.

Inflation means prices across the economy are rising over time, reducing the purchasing power of money. A fiscal deficit occurs when a government spends more than it collects in revenue during a period. Controlling inflation and the deficit can improve predictability and financial stability, which are useful foundations for an economy.

But stability is not the same as growth. Businesses also need financing, customers and confidence to invest and hire. Argentina’s IMF programme therefore includes deeper capital and mortgage markets, infrastructure concessions, labour-market changes and strategic projects under RIGI. These measures address activity and employment, not only government finances.

The article shows the gap clearly. The IMF praised Argentina’s spending cuts and efforts to control inflation and the fiscal deficit, yet it also highlighted roughly 90,000 lost jobs since August 2023. The Fund wants the government to preserve its fiscal anchor while directing credit more effectively and turning stabilisation into durable growth.