Argentina, $4.7 Billion from IMF to Support Milei’s Reforms

The International Monetary Fund (IMF) announced a $4.7 billion payment to Argentina to be used by President Javier Milei’s new government to implement its reform plan. This additional funding comes despite Argentina not meeting the conditions set for the institution’s previous $43 billion loan.

The terms of the new agreement between Buenos Aires and the IMF provide for a budget surplus of 2% of GDP and the accumulation of reserves in the Central Bank in the amount of $10 billion in 2024. Those are the terms of this new $4.7 billion, which represents the seventh edition of the Extended Fund Facility (EFF) agreement to repay the $45 billion allocated in 2018.

“IMF staff and the Argentine authorities have reached an agreement on a series of economic measures capable of restoring macroeconomic stability in Argentina and getting the current program back on track,” the IMF note explained. “This agreement, subject to consistent and sustainable implementation of policies, will be presented to the IMF Board of Directors for approval in the coming weeks. Upon completion of the review, Argentina will get access to approximately $4.7 billion, which corresponds to some re-phasing of the program budget.”

Meanwhile, Argentina’s annual inflation rate in 2023 was 211.4%, the highest since the early 1990s, while monthly inflation stood at 25.5% in December, which is below forecasts following the sharp devaluation of the peso.

The new funds will be used to pay for the next deadlines, and in the meantime, Javier Milei’s decisive economic recovery maneuvers must be approved by Congress. This in itself is a tough fact, and then, perhaps, the most difficult step will be to ensure that they are accepted by the population already exhausted by the endless crisis.