Updated to Thursday 13.6.2024 23:52hs
The executive board of the International Monetary Fund (IMF) approved this Thursday the eighth review of the agreement with Argentina, which allows an immediate disbursement of approximately 800 million dollars.
Upon completing the review, the credit body’s board considered that the program is “firmly on track” and that it meets “all quantitative performance criteria until the end of March 2024 met with margins.”
However, in its statement, the IMF emphasized that “to maintain solid progress, it is crucial to improve the quality of fiscal adjustment, initiate steps toward an improved monetary and exchange rate policy framework, and implement the structural agenda.”
Likewise, he once again noted the need for the Argentine Government to strengthen “efforts to support the most vulnerable, expand political support and guarantee agility in policy formulation.”
With the new disbursement of $800 million, the total funds disbursed under the Expanded Fund Facility (EFS) amounts to approximately $41.4 billion.
Emphasis on fiscal balance
The Ministry of Economy of the Nation highlighted in a statement the goal achieved that it attributed to fiscal balance to achieve macroeconomic stabilization. “The objective of financial balance contemplated in the Agreement was achieved in record time,” he noted.
While he focused on the financial balance achieved in the Public Sector starting this year, which led to eliminating “the chronic need to finance the fiscal deficit via net debt from the Treasury or monetary issuance.”
“Starting from a financial deficit of 4.6% of GDP in 2023, in the first four months of the year the primary surplus amounted to 0.7% of GDP and the financial surplus to 0.2% of GDP. This result was achieved with a combination of permanent spending cuts and temporary tax increases,” the statement highlights.
The next stages of the program and future reviews will continue to be crucial to evaluate progress and adjust strategies as necessary.
In that sense, from the Treasury Palace, it was reported that a payment in an approximate amount of USD645 million is scheduled for next July.
In November it will be the turn of the last payment to the IMF contemplated within the framework of the current program. From there, “during the next 2 years (until September 2026) Argentina does not face any more principal repayment maturities with the IMF.”
In parallel with the disbursement, President Javier Milei will have a meeting with the President of the IMF, Kristalina Georgieva, during his stay in Europe.
The meeting with Georgieva has as a backdrop the negotiation for a new economic program with the organization, which would include the rescheduling of the payment of interest and capital of the debt, among other issues.
This will be the second meeting that Milei will have with the managing director of the IMF. In mid-January they had a first face-to-face meeting during the World Economic Forum in Davos, days after the organization’s board had approved the seventh review of quarterly objectives and a disbursement of USD 4.7 billion.
