Argentina passes review according to the IMF and will receive contribution

Argentina passes review according to the IMF and will receive contribution
Argentina passes review according to the IMF and will receive contribution

Washington (EFE).- The International Monetary Fund (IMF) announced this Monday that it reached an agreement with the Argentine authorities on the eighth review of the debt financing program, for which 800 million dollars will be disbursed.

“Based on better than expected results, all performance criteria were exceeded and policy understandings were reached to further reduce inflation, replenish international reserves, support the recovery and keep the program firmly on track,” noted the IMF in a statement.

What does the agreement between Argentina and the IMF consist of?

The agreement will now have to go through a formal procedure and must be approved by the IMF executive board in the coming weeks. At that time, Argentina will receive the 800 million dollars, according to the disbursement schedule.

In March 2022, the then Government of the Peronist Alberto Fernández (2019-2023) signed an agreement with the IMF to refinance loans for about 45,000 million dollars that the organization had granted to Argentina in 2018, during the Government of the conservative Mauricio Macri ( 2015-2019).

The agreement includes quarterly reviews on the level of compliance with demanding goals in terms of fiscal discipline, accumulation of monetary reserves and limits on monetary issuance.

The fulfillment of these goals and the approval of each review depends on the approval for new disbursements to Argentina by the organization, funds that, in turn, the South American country applies to cancel its debt with the entity, which amounted to 40,899 million. of dollars at the end of 2023.

The eighth review corresponds to the first quarter of this year, a period marked entirely by the drastic change in economic policy in Argentina after the arrival of the libertarian Javier Milei to the Presidency last December and the implementation of a severe adjustment plan with the objective of recovering the fiscal surplus this year.

A plan that has been applauded by the IMF, an institution that has only had words of support: “Despite inheriting a highly complex economic and social situation, the firm implementation of the authorities’ stabilization plan has allowed progress faster than expected. in reestablishing macroeconomic stability and firmly redirecting the program,” notes the IMF.

What do the country’s most recent economic results say?

Among the “most notable” results of this quarter, adds the IMF, is that the first quarterly fiscal surplus in 16 years has been achieved in Argentina, the rapid fall in inflation, the change in trend of international reserves and a strong reduction of sovereign risk.

According to official sources of the Argentine Government, the fiscal surplus accumulated in the first quarter was 3.8 trillion pesos (4,243 million dollars), equivalent to 0.6% of GDP.

Meanwhile, the accumulated financial result (after paying interest on the debt) was positive at 1.13 trillion pesos, equivalent to 0.2% of GDP.

Meanwhile, in the first quarter of the year, the Central Bank’s international reserves grew by 4,054 million dollars, to 27,127 million dollars.

Last February, the IMF management approved to extend the agreement with Argentina until December 31, 2024 and to recalibrate the planned disbursements within the resource allocation of the current program.

Last January, the seventh review was approved, which allowed a disbursement of $4.7 billion, the first under Milei’s mandate.

 
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