Argentina’s top priority must be to combat inflation and cut its primary deficit by two percentage points by 2018-2019, stated the International Monetary Fund (IMF) in a report.
“An even faster decrease could help lower real interest rates while following the disinflation process, and eliminate pressures on the currency exchange rate, which still seems somewhat miscalculated in real terms,” said the IMF.
According to the Fund, a lower fiscal deficit would likewise minimize dangers from changes in external financial conditions and the crowding-out effects on private investment.
The IMF thinks that “financial rebalancing would need to be based on further decreases in the generous and ill-targeted energy aids and on a rationalization of costs in lots of other areas, including services, earnings and goods, and discretionary transfers to the private sector and provinces.”
The IMF believes that Argentina will grow 2.5% this year as a financial recovery occurs, improved by larger public costs and greater private usage.
The material has been supplied by InstaForex Business – www.instaforex.com