The International Monetary Fund on Tuesday said it had reached a staff-level agreement with Argentina on the third review of the country’s bailout, potentially unlocking about $900 million for the Latin American country.
In 2025, as it dealt with rampant inflation and currency depreciation, Argentina concluded an extended fund facility agreement with the IMF worth around $20 billion over four years. The agreement is subject to approval by the IMF’s Executive Board, after which the tranche can be disbursed to the Argentinian government. The social spending cuts instituted by his government with the IMF’s approval have been deeply unpopular, prompting frequent protests.
Since then, President Javier Milei has instituted a wide-ranging reform plan involving slashing public spending and reining in inflation.
Since Milei took office in December 2023, inflation has dropped from triple digits to the current 33.5 percent. On the fiscal side, the IMF said Argentina had committed to delivering a primary surplus of 1.4 percent of GDP this year and next. Argentina is the IMF’s largest debtor and has $1.2 billion in debts to the Fund due this year, with a further $7.8 billion due next year. Mortgage defaults have tripled over the past year, hitting 12.8 percent, the highest level in 20 years. Growth remains sluggish and earlier this month the IMF downgraded its forecast for GDP expansion to 2.1 percent in 2026. bur-aha/msp This article was generated from an automated news agency feed without modifications to text.
It also praised the structural reforms instituted by the government “in the areas of trade, labor, investment and capital markets,” saying they were “enabling a more efficient and market-based economy. In terms of monetary policy, the central bank would take actions to support disinflation and reserve accumulation, while allowing exchange rate flexibility within a band, the IMF said. On the reform agenda, the IMF said priority would be given to deepening domestic capital markets and expanding access to longer-term financing, among other steps.
It lauded a marked improvement in the country’s fiscal buffers and foreign exchange reserves. Part of the agreement for the release of the latest tranche of the bailout involved pledges from the Argentinian government to deliver further promises on both fiscal and monetary policy. economic performance has been lacking in other key areas While Milei’s government has succeeded in reining in runaway inflation. Consumer activity is anemic while debt defaults are skyrocketing.
In a statement on Tuesday, the IMF said Milei’s reform program had delivered “impressive results.
