Argentina's Milei discusses inflation with IMF chief

DAVOS, Switzerland — Argentina's President Javier Milei held a positive meeting with International Monetary Fund chief Kristalina Georgieva in Davos on Wednesday, focused on the South American country's deep economic crisis and its $44-billion IMF program.

"Very good meeting with Argentina's President Javier Milei," Georgieva wrote on X, formerly Twitter, after meeting the right-wing leader who is pushing a tough austerity package to bring down the inflation rate, which is above 200 percent, even while two-fifths of people are living in poverty.

"We talked about Argentina's deep economic and social challenges and decisive steps underway to bring down inflation, promote private sector-led growth, and use scarce public money to help the most vulnerable people," she said.

Earlier in the day, Milei had praised free markets. "Free enterprise capitalism is the only tool we have to end hunger and poverty," he said.

Milei shot to power last year on the back of voter anger at the worsening economic crisis, often campaigning with a chainsaw to underscore his plans to slash the size of the state. He needs to rebuild depleted foreign currency reserves and spur growth.

He is pushing major economic reforms, including spending cuts and deregulation, in a bid to improve the government's finances and boost the economy. But he faces high poverty levels and the real threat of social unrest.

Milei earlier met with British Foreign Minister David Cameron, discussing "deepening commercial ties, the support they will give us in the IMF and how to promote British investments in Argentina", Milei's office said in a readout.

Argentina is racing to salvage its massive loan program with the IMF, the Washington-based lender's largest globally. Last week, it secured an agreement with the IMF over the program's latest review, which should unlock funds worth $4.7 billion.

According to a Davos briefing on Argentina, the country's relationship with the IMF is "very good "and the government is confident of meeting objectives in a tough economic plan that surpasses what the fund is demanding.

Milei's libertarian coalition, which only has a small bloc in Congress but has won over conservative allies, is confident of passing its major reform bill, part of a first wave of economic reforms, but has backup plans if it fails.

Planned tax hikes as part of these reforms — going against campaign pledges to cut taxes — were a necessary step to bring in revenues to pay for social programs for the most vulnerable, but the aim was that these would last no more than a year.

Agencies Via Xinhua