Argentina's anti-establishment candidate Milei engages IMF in economic talks after shock primary win

BUENOS AIRES, Argentina (AP) — Argentina’s right-wing populist presidential candidate Javier Milei met Friday with International Monetary Fund officials to explain his economic proposals for the country, days after he became the surprise front-runner for the October election.

Milei, an anti-establishment conservative who wants to get rid of the Central Bank and replace the local currency with the dollar, shocked the South American country’s political establishment by receiving the most votes in national primaries Sunday.

Argentina, which has been suffering economic malaise for years and is reeling from a devastating drought that decimated the country's cash crops, currently has a 30-month $44 billion loan program with the IMF.

During the virtual meeting that lasted a little more than an hour, Milei and members of his economic team assured IMF officials they had no intention of stopping payments to the multilateral organization nor defaulting on any of the country’s debts. The IMF officials included the head of the IMF's Western Hemisphere Department, Rodrigo Valdes

“We are not going to default on either the IMF nor sovereign debt,” Milei told the IMF officials, according to a message posted on social media by Darío Epstein, one of the candidate’s key economic advisers.

Milei also laid out his Liberty Advances party platform for Argentina’s economy to IMF officials, including “a significant fiscal adjustment, more significant than the one demanded by the IMF,” according to a statement issued by the candidate’s campaign.

Milei and his team also mentioned their goals to open the economy, modernize labor laws, slash spending through deep reforms of the state and a "monetary reform that ends the Central Bank,” among others.

Milei, 52, gained a rockstar-like following by raging against the “political caste” on television. He received 30% of the votes in the country’s national primaries on Sunday, as compared with 28% for the main opposition bloc and 27% for the current ruling coalition.

The results of the primary are seen as an indication of how citizens are likely to vote when they go to the polls in October.

Earlier in the week, IMF officials had met with the economic advisers of Patricia Bullrich, who emerged as the presidential candidate for the main opposition coalition, United for Change, according to an IMF official who spoke on condition of anonymity because they were not authorized to speak on the record.

The discussions were part of "routine engagements with a broad spectrum of political and economic stakeholders,” the official added.

The government devalued the peso by around 20% and hiked its benchmark interest rate after Milei’s victory, which roiled the markets amid uncertainty about how the presidency would look under a politician who describes himself as an “anarcho-capitalist."

The peso also depreciated sharply in the informal markets, leading to a surge in prices that will accelerate consumer prices in a country that is already experiencing a galloping annual inflation of more than 100%.

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Salomon reported from Miami.