"Argentina owes the International Monetary Fund 10% of its GDP," warns former Customs chief

Former Director General of Customs, Guillermo Michel, strongly criticized the national government 's current agreement with the International Monetary Fund ( IMF ) and warned that debt has reached alarming levels. "Argentina already owes the Fund 10% of its Gross Domestic Product," he said.

On the other hand, Michel accused the IMF of granting a "political loan" to support President Javier Milei until the elections, without demanding compliance with economic goals. He also questioned the impact this level of debt will have on the country's future.

"Behind this economic program is a decision by the International Monetary Fund to support the government electorally," Michel said in a statement to Radio Splendid.

He maintained that "the International Monetary Fund not only gave them that political loan, $20 billion, so they could arrive in the best possible shape for the elections, but now, three months after the disbursement approval in April, since none of the objectives have been met, they are still moving forward."

"The problem is that all Argentines are going to have to repay the money ; we've reached the point where Argentina owes the International Monetary Fund 10% of its GDP. They're going to make almost $60 billion when all the disbursements are completed," he added.

He said, "If you look at the maturity bars, or the capital payment towers for that debt starting on the 27th, it's really hard to figure out how it's going to be repaid, how the evolution schedule is set up, or what they're going to ask for in return."

Guillermo Michel

Gentleness

In this context, he argued that there are two issues that serve as anchors: "Wages, which is why they are lagging behind inflation, and fundamentally the dollar."

"With the dollar's decline, what's happening is the destruction of Argentine industry," he noted, citing as an example "Argentina's importing of oranges from Egypt" because "there's been an adjustment in relative prices in our country that makes production very difficult."

He explained that "you have the dollar stuck, you have no exchange rate adjustment, and you have extremely high inflation in dollars. And an adjustment in relative prices, which, with everything related to regulated prices, electricity, gas, rent, and provincial taxes, is extremely high. This not only makes it very difficult to export, but also makes it difficult to produce."

Michel said that Argentina is heading toward "a model of Peruvianization of the Argentine economy. Where you'll have a few sectors with a lot of power, people in a very small circle, orbiting those sectors with high purchasing power, but everyone else will be service providers with no purchasing power."

"Let's do what the United States does. The United States protects its industry, imposes tariffs on other countries' production, and Trump also guarantees cheap energy for local industry," he concluded.