The Fund outlined four priorities for turning economic stabilisation into stronger growth and job creation as it backed a new $900 million disbursement.

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The International Monetary Fund (IMF) on Thursday urged Argentina to maintain its economic programme, warning that sustained policy implementation and stronger international reserves remain essential to reducing country risk as concerns grow over a possible technical recession.

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IMF spokeswoman Julie Kozack said the government should continue implementing its current policies while ensuring that the benefits of economic stabilisation translate into stronger growth and employment.

“Our best advice for Argentina to continue reducing its country risk is to continue with its strong policy implementation, that is, to keep implementing the programme as it has been doing,” Kozack told a news conference in Washington.

She stressed that accumulating net international reserves and strengthening the country’s external position were fundamental to reducing financial risks. The Fund’s broader message, she added, was to maintain the current policy direction while extending the benefits of stabilisation across the economy.

🇦🇷💸 | Ante las declaraciones directas del presidente de la nación Argentina, Javier Milei, la escalada de la crisis económica golpea con dureza a la sociedad, donde la mayoría de la población lucha diariamente contra el endeudamiento y la precariedad laboral. La realidad es que… pic.twitter.com/J4RLdc4uvQ

— teleSUR TV (@teleSURtv) October 22, 2026

Text Reads: | In light of the direct statements from Javier Milei, president of the Argentine nation, the escalation of the economic crisis is hitting society hard, where the majority of the population struggles daily against debt and job precariousness. The reality is that surveys reveal that nearly 6 out of 10 Argentine citizens have had to go into debt to survive amid the drastic drop in purchasing power. At the same time, the lack of employment and the loss of social rights worsen a landscape that deeply affects the quality of life of families, especially the youth. Popular discontent is growing in the face of official responses that seem to ignore the urgency of the crisis, forcing us to understand “The Other Side of the Coin”.

Addressing questions about the possibility of Argentina recording two consecutive quarters of economic contraction, Kozack outlined four priorities agreed upon with the government to support growth and job creation.

These include deepening capital and mortgage markets to expand access to financing, introducing greater flexibility in the labour market to encourage private-sector employment, advancing infrastructure projects awarded through concession agreements, and facilitating strategic investment through the Incentive Regime for Large Investments (RIGI).

Projects approved under the investment incentive scheme already exceed $76 billion, according to the IMF.

The Fund’s latest assessment comes as its staff and Argentine authorities reached an agreement on Tuesday on the third review of the country’s Extended Fund Facility programme, potentially unlocking a disbursement of approximately $900 million.

Kozack said the IMF Executive Board could consider the review in early December.

The Fund said the programme had continued to deliver results despite a more challenging international environment. Net international reserves exceeded the June target by approximately $4 billion, while the Central Bank purchased nearly $16 billion in foreign currency during the year.

The Treasury also raised more than $5 billion in domestic markets. With support from official creditors, the government secured $3.2 billion in guaranteed financing from international banks and was working to obtain an additional $1 billion before the end of the year.

The agreement maintains Argentina’s target of a primary fiscal surplus equivalent to 1.4% of gross domestic product (GDP) in 2026, with a similar fiscal effort planned for 2027. It also preserves the existing exchange rate band system.

However, the economic outlook remains weaker than previously expected. In October, the IMF lowered its 2026 growth forecast for Argentina from 3.5% to 2.1%, underscoring the challenge of turning stabilisation gains into sustained economic expansion.

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The European Central Bank says artificial intelligence investment, changing energy consumption and increased government spending have helped the eurozone withstand this year’s energy crisis, although economists warn that several sources of growth may prove temporary.

The eurozone economy has proved more resilient to the energy price shock of 2026 than economists initially expected, supported by increased investment in artificial intelligence, reduced dependence on fossil fuels and higher government expenditure, according to an assessment published by the European Central Bank on Wednesday, 21 October.

ECB economists Óscar Arce, Gerrit Koester and Beatrice Pierluigi found that structural changes in European energy consumption have reduced the economic consequences of rising oil and gas prices. Stronger international demand for technology equipment and additional public spending, particularly in Germany, have also supported growth.

The findings come as the ECB faces renewed inflationary pressure following disruption to global energy markets caused by the conflict involving Iran, raising questions about the outlook for interest rates and economic activity.

Eurozone growth withstands energy shock

In their assessment of the eurozone’s economic resilience, ECB economists reported that economic output continued to expand despite the sharp increase in energy prices earlier this year.

Excluding Ireland, where economic statistics are frequently affected by the activities of multinational companies, real eurozone GDP in the second quarter was 0.6 per cent above its level at the end of 2025.

The ECB also identified quarterly growth of approximately 0.3 per cent over the preceding four quarters, excluding Irish figures.

These results exceeded earlier expectations that the disruption to energy markets would have a greater impact on European manufacturing, consumer spending and business investment.

Nevertheless, the eurozone’s rate of expansion remains modest compared with its longer-term historical performance.

The ECB’s findings suggest that the economy has become better able to absorb international disruptions without experiencing the immediate contractions that might previously have followed comparable energy price increases.

Reduced reliance on imported oil and gas

One of the most significant structural changes concerns energy consumption.

According to the ECB, the eurozone economy is now approximately half as dependent on oil as it was during the early 1990s, measured against economic output.

Greater energy efficiency, the expansion of services and investment in alternative electricity generation have progressively reduced the amount of fossil fuel required to produce economic activity.

The growth of renewable energy has also altered the relationship between natural gas prices and electricity costs.

In Spain, the proportion of hours during which gas-fired power stations determined wholesale electricity prices fell from approximately 80 per cent in 2020 to just over 20 per cent during the first nine months of 2026.

France recorded a similar decline, from approximately 60 per cent to around 20 per cent, supported by its extensive nuclear generating capacity.

Consequently, increases in international gas prices are having a smaller effect on electricity markets in countries with substantial renewable or nuclear generation.

The ECB cautioned, however, that European economies remain exposed to global energy disruptions, particularly through industrial activity and international supply chains.

Artificial intelligence provides unexpected support

The international expansion of artificial intelligence has generated an additional source of demand for European manufacturers and technology companies.

Investment in computing infrastructure, digital services and specialised equipment has increased demand for products supplied by European businesses.

According to the ECB, global trade has performed considerably better than expected at the end of 2025.

The latest projections indicate international trade growth of approximately 4.7 per cent in 2026, compared with the 2 per cent forecast in December.

AI-related investment accounts for part of that improvement.

European manufacturers producing specialised machinery and technology equipment have benefited from increased export orders, while domestic investment in technology has supported economic activity.

However, the ECB found that the effects vary considerably between sectors.

Technology-equipment manufacturers recorded comparatively strong growth in output, employment and new orders.

Software companies performed better in output terms, but the improvement was less evident in employment and new business.

This uneven performance suggests that the economic benefits of the AI investment cycle are concentrated in particular industries.

German spending strengthens European demand

Fiscal policy has provided another source of support.

The ECB estimates that the expansionary fiscal stance in the eurozone has increased to approximately 0.5 percentage points of GDP, twice the level anticipated in December 2025.

Much of the additional stimulus reflects higher German government spending on defence and infrastructure.

Other eurozone governments have introduced measures to limit the effect of energy prices on households and businesses.

Public investment and expenditure have therefore helped compensate for weakness in areas affected by higher import costs and international uncertainty.

Yet the ECB warned that fiscal support cannot necessarily continue at its present level.

Several eurozone governments face borrowing constraints, while additional public spending can place pressure on national budgets.

Interest-rate decisions remain difficult

The ECB’s assessment comes amid expectations of further monetary tightening as policymakers respond to renewed energy-related inflation.

The central bank must consider whether higher energy costs will remain temporary or begin influencing wages, prices and inflation expectations more broadly.

Additional interest-rate increases could reduce inflationary pressures but would also raise borrowing costs for businesses, governments and households.

The economic recovery remains exposed to potential reversals in global demand, international trade and investment in artificial intelligence.

The ECB’s economists also identified geopolitical escalation and further supply-chain disruption as continuing risks.

Their findings indicate that reduced fossil-fuel dependence has made the eurozone less vulnerable to energy shocks, while technology investment and government spending have provided additional support.

Whether that resilience continues into 2027 will depend partly on the durability of international demand and the ability of European governments to maintain investment without increasing inflationary pressure.

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