Ciara Nugent’s article on the recent IMF visit to Argentina provided a very good summary of the progress that has been made on the economy by President Javier Milei’s administration (“Argentina’s Milei attempts to defuse peso control bomb”, Report, February 8).
One of the main economic indicators the IMF team will have focused on is the primary fiscal surplus that has been achieved, and whether this is sustainable through 2025 and beyond.
As part of the consolidation of the BCRA (Central Bank of Argentina), the government issued fiscal liquidity bills (letras fiscales de liquidez, or LeFis), and while this was expected to be a short-term measure, the outstanding amount of these instruments has nearly doubled in the course of the second half of 2024.
The LeFi is a pay-in-kind one year bill, and the pay-in-kind feature means that the interest accumulating via the pay-in-kind accrual is not reflected as an interest cost in the fiscal accounts of Argentina.
One of the IMF plan’s conditions is that the BCRA adopt IFRS accounting standards, something which remains outstanding and is one of the obstacles to a more significant IMF plan for the country. It would be an enormous boost to the transparency of Argentina’s government figures if the BCRA adopted IFRS, and a clearer picture of the real fiscal balance was presented to both the IMF and the markets.
Robert Lough
Part of Kleinwort Benson team advising the Carlos Menem government 1993-1999, Oxford, UK
