Rene Alaniz

357L

"Argentina Grants Wage Increases in Spite of IMF"

By George Hatch, The Wall Street Journal 07/16/84

Summary: Argentina’s granted wage increases which IMF feels will add more fire to the 580% annual inflation. This also shows that the IMF and Argentina still have ways to come in coming to an agreement over the economic austerity plan. While pay was increased organizations such as The General Confederation of Labor have denounced the increases as to small. It is believed by organizations that companies will rescind their initial pay increases which were more than the government figure. While the IMF has said that Argentina must make austerity commitments before it will help to pay 5.5 billion interest owed at the end of the year. The Argentine government believes that an agreement is near because it has reduced its budget deficit and is in favor of large trade surpluses. Such measures will help to provide currency for the debt owed. While Argentina will send a delegation to the U.S. with new numbers, the IMF believes the wage issue will remain floating. Argentina will keep wage guidelines and monetary policy less than the inflation, but at some crucial political time will grant a new wage increase.