The International Monetary Fund (IMF) agreed on Wednesday to the latest review of its program with Argentina, valued at $44 billion, allowing for the disbursement of $4.7 billion.
They praised the performance of President Javier Mayli, who is implementing a “bold” cost-cutting policy to restore the country’s struggling economy to the right path.
The statement from the fund said that despite not achieving the main program goals by the end of last year “due to severe setbacks in politics,” exemptions from noncompliance have been granted.
The fund stated that the program’s objectives have been revised to align with the initial actions of the authorities and their ambitious plans to get the program back on track.
The council also agreed to extend the program until December 31, 2024, “along with some planned repayments within the current scope of the program.”
The International Monetary Fund did not provide further details about the changes.
The government and employees of the International Monetary Fund recently agreed on the seventh review of the program, which was delayed due to the change in government with Javier Marley assuming his position on December 10th.
The Managing Director of the International Monetary Fund, Kristalina Georgieva, said in a statement: “The new administration is taking bold actions to restore macroeconomic stability and begin addressing long-term obstacles to growth.” She added that “inconsistent policies of the previous government” had left a “difficult legacy.”
Earlier this week, the International Monetary Fund reduced its projections for Argentina’s gross domestic product for the year 2024, expecting it to contract by 2.8 percent, compared to the previous outlook of 2.8 percent expansion.
This is largely due to the anticipated effects of the proposed reforms by the new government.
The fund stated that the approval on Wednesday reduces payments within the program, valued at $44 billion, to $40.6 billion. It clarified that after the recent currency devaluation and “exchange rate recalibration,” the new policies need to “continue to ensure reserve accumulation goals.”
According to the latest data released by the central bank, Argentina’s reserves increased to USD 27.6 billion on Wednesday from USD 25.1 billion at the close of Tuesday.
The announcement of the International Monetary Fund came on the same day that the Argentine Congress began a marathon session that could last several days to discuss the massive reform bill proposed by Macri.
His extensive reform package covers all areas of public and private life, from privatization to cultural issues, criminal law, divorce, and the status of football clubs.
Thousands of protesters gathered outside the Congress headquarters to express their dissatisfaction with these reforms, and some clashed with the police, who evacuated nearby roads and used tear gas.
Macri’s party, “Libertad Avanza,” does not have a majority in Congress, and moderate opposition deputies have warned that they will seek further amendments to his reforms, especially regarding granting special powers to the executive authority in cases of economic emergencies and privatization.
reuters
