International Monetary Fund Managing Director Kristalina Georgieva praised Argentine President Javier Milei’s austerity policies and reform agenda on Monday, saying they have restored market confidence in a country long known as a serial defaulter on its sovereign debt.

Georgieva, the first IMF chief to visit Buenos Aires in eight years, said she was confident Argentina could meet its debt obligations. Argentina is the fund’s largest debtor, with about $58 billion in outstanding IMF loans, and faces a critical repayment period beginning next year, when Milei is expected to seek reelection.

“Argentina is in a much stronger position, and this is the result of the government’s hard work and the perseverance and sacrifice of the Argentine people,” Georgieva said at a news conference with Economy Minister Luis Caputo.

Georgieva said Argentina’s debt was among the first issues she discussed when she became IMF managing director in 2019.

“We were debating whether the country would be able to keep up with servicing its debt obligations to everyone. That is not the question we should be asking today,” she said.

Her visit comes as Argentina’s economic outlook has improved, with bond prices rising, central bank reserves increasing and inflation declining. Annual inflation has slowed to 33%, down sharply from 210% when Milei took office in late 2023. Last week, Moody’s upgraded Argentina’s sovereign credit rating, following earlier upgrades by S&P and Fitch.

“What we have today is a much healthier picture,” Georgieva said. “Market confidence has returned.”

The improved outlook has not removed the near-term financing challenge. Argentina will begin repaying principal on its IMF loans in September, adding to its interest payments, while its broader foreign-currency debt obligations are set to rise sharply in 2027. That makes the country’s access to external financing and its reserve position important markers to watch as the government tries to keep its adjustment on track.

Georgieva is scheduled to visit Vaca Muerta on Tuesday, one of the world’s largest reserves of unconventional oil and natural gas. Its development is expected to become one of Argentina’s main sources of foreign-currency earnings in the coming years.

She also said she sees no need for additional IMF disbursements before the 2027 presidential election.

“We may be on a good track for Argentina to join the club of emerging markets that have borrowed from the Fund, reformed their economies and borrowed no more,” Georgieva said.

Investors are closely watching Argentina’s ability to meet its upcoming debt payments. The country will begin repaying principal on its IMF loans in September, adding to its interest payments, while its broader foreign-currency debt obligations are set to rise sharply in 2027.

Caputo has said the government expects to cover those payments with funding from multilateral lenders, proceeds from privatizations and domestic borrowing rather than by returning to international capital markets.

Despite the improving economic indicators, Milei has faced falling approval ratings as his austerity policies have coincided with weak consumer spending, stagnant wages, rising household debt and a modest increase in unemployment.

The president’s declining popularity has raised questions about his prospects for reelection in 2027 and increased investor uncertainty about whether his economic reforms would continue under a future administration.

Asked about that possibility, Georgieva said those risks are best managed “by building strong policies during the time we have now … policies that inspire confidence among the people of the country and the international community.”

Georgieva also said Argentina still has work to do in areas including construction, expanding credit for small businesses and mortgages, and reducing informal employment.

This story was originally featured on Fortune.com