The International Monetary Fund (IMF) has reached a staff-level agreement with Argentina on the latest review of its US$20-billion loan programme, paving the way for a fresh US$1-billion payout.<\/p>\n
In a statement, the IMF confirmed the deal with President Javier Milei\u2019s government following the second review of their 48-month Extended Fund Facility (EFF) agreement.<\/p>\n
The new tranche \u2013 the third under the programme approved in April 2025 \u2013 still requires sign-off from the IMF\u2019s Executive Board.<\/p>\n
The review process had dragged on for months, with staff last visiting Buenos Aires in early February.<\/p>\n
If the staff report is approved by the IMF\u2019s board, Argentina would receive a US$1-billion disbursement, taking the total released through the deal to US$15 billion.<\/p>\n
The country begins principal repayments in September under its prior agreement with the lender.<\/p>\n
Economy Minister Luis Caputo, who travelled to Washington for the IMF\u2019s Spring Meetings this week, described the deal as a \u201cvery important step.\u201d<\/p>\n
He thanked Managing Director Kristalina Georgieva for her \u201cleadership and commitment\u201d throughout the process.<\/p>\n
\u201cThis agreement is a very important step in consolidating the macroeconomic stability we have been working towards over the past two years, and it will help to strengthen our country\u2019s economic growth,\u201d Caputo said.<\/p>\n
Argentina has managed \u201cto weather spillovers from the Middle East war well,\u201d the IMF said in its communiqu\u00e9. \u201cPolicy momentum has strengthened in recent months with congressional approval of the 2026 Budget and critical reform legislation,\u201d said the IMF.<\/p>\n
Monetary and exchange rate policies are \u201cimproving Argentina\u2019s capacity to manage shocks,\u201d it added.<\/p>\n
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\u201cBuilding on impressive stability gains, understandings were reached on a strong and balanced policy package aimed at entrenching disinflation, external stability, and growth, thereby supporting timely and sustainable market access,\u201d the statement read.<\/p>\n
Praising the Milei administration, the IMF pointed to \u201cstrong and constructive engagement\u201d with authorities and their continued commitment to the programme, including corrective measures to address earlier setbacks.<\/p>\n
The announcement offers relief to the government, coming a day after March inflation data showed consumer prices rose 3.4 percent \u2013 the highest monthly reading in a year.<\/p>\n
Milei has slashed annual inflation from 117 percent in 2024 to 31 percent in 2025, though progress has stalled since mid-2025.<\/p>\n
Argentina posted a fiscal surplus in 2025 and, after securing improved representation in Congress in last October\u2019s midterm elections, Milei has pushed forward with reforms, including changes to labour laws.<\/p>\n
The exchange rate \u2013 with a strong peso against the US dollar, at 1,385 pesos at the official rate \u2013 has encouraged imports, which the government has boosted through deregulation policies.<\/p>\n
A surge in imports, mainly from China, has helped bring down prices but has also weighed on national industry, which recorded an 8.6 percent year-on-year drop in February.<\/p>\n
The IMF anticipates lower growth this year than in 2025 \u2013 3.5 percent compared to 4.4 percent in 2025. Inflation is forecast at around 30 percent.<\/p>\n
The Fund said that it had agreed with Argentina on a series of additional reforms \u201cto entrench the impressive stabilisation gains and sustained reductions in poverty levels since end-2023.\u201d<\/p>\n
Argentina’s economy expanded last year, after two years of contraction.\u00a0<\/p>\n
However, growth was uneven, with some sectors \u2013 such as financial services, agriculture and mining \u2013 expanding, while others \u2013 like manufacturing and retail trade \u2013 slowed.<\/p>\n
Unemployment remains concerning, increasing by 1.1 percentage points to 7.5 percent over the past year, not including the large number of people informally employed across the country.<\/p>\n
\u201cThe chainsaw will not stop,\u201d Milei said in a speech on Tuesday, referring to his fiscal austerity drive. He said that he would \u201cremove all pesos from circulation until the inflation rate collapses\u201d and \u201ccontinue opening up the economy.\u201d<\/p>\n
Argentina returned to international debt markets in December, issuing foreign-currency bonds after more than seven years.<\/p>\n
\u201cNet international reserves are projected to increase by at least US$8 billion in 2026,\u201d the IMF said.<\/p>\n
The country has defaulted several times, twice this century \u2013 in 2001, amid a social upheaval that left 39 dead, and again in 2020 during the Covid-19 pandemic.<\/p>\n
Relations with the IMF have long been strained, marked by protracted negotiations to resolve arrears.<\/p>\n
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\u2013 TIMES\/AFP\/NA<\/p>\n
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