Ilan Goldfajn of the International Monetary Fund/IMF. Image: AP

Ilan Goldfajn. (AP)

LatAm in Focus: What the IMF's Ilan Goldfajn Sees in Latin America's Economic Future

The new director of the International Monetary Fund’s Western Hemisphere Department spoke about curbing inflation and increasing potential growth.

No one said the path to economic recovery from the Covid-19 pandemic will be easy, and a global inflationary environment is causing concern. But Latin America does have one thing going for it: proactive central bankers who are looking at history, said Ilan Goldfajn, the newly installed director of the International Monetary Fund’s Western Hemisphere Department. “Central banks and governments know that the region has a history. They know that there is a risk of indexation, more inertia, or more widespread inflation. So that’s the reason why we have seen reaction of central banks being ahead of other central banks from other regions,” he told Susan Segal, president and CEO of the Americas Society/Council of the Americas. In their conversation, the former president of Brazil’s Central Bank said that Latin America’s central banks “have been quite successful in [reacting to inflation] in the sense that, when you look at longer-term expectation, they are actually under control.”

“Part of the inflation is global but part is locally produced.”

That said, staving off inflation is not enough to drive recovery. Goldfajn noted that the IMF has three main goals for Latin America and the Caribbean in order to avoid another “lost decade,” as he put it. First, countries must manage debt and commit to fiscal consolidation. Second, the region needs to increase its growth potential through structural reforms and expanding productivity. Finally, governments need to meet the growing social demands around issues like gender, race, climate change, and income inequality.

On this last point, Goldfajn said he didn’t think social responsibility and fiscal responsibility were mutually exclusive. “I think you can look at your priorities and choose what is important,” he explained. “Don’t overspend and know that you have just come out of large spending over the pandemic. Still protect the poor and still deal with the progressive demands of the people—but you’ll have to make choices.”

Goldfajn also addressed the IMF’s ongoing negotiations with Argentina. “We are in very close engagement with the Argentine authorities in order to reach staff-level agreement, which is the complete agreement with all the details, with all the reforms,” he said. Goldfajn continued, “This is a program that is realistic, pragmatic, and credible—a program that can be owned by Argentina in a broader sense.”

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Chase Harrison wrote the episode summary above, and Luisa Leme produced the episode.

The song heard in this episode is “New Padjanbel,” which explores the Guadeloupean gwo-ka musical tradition. It is performed by the Jacques Scwarz-Bart Quintet, who joined Americas Society for our En Casa series last year. Check out more performances at