The Argentine government and the IMF closed on Monday the second review of the debt refinancing agreement reached between the two in March, in a “more difficult” global context due to inflationary pressures, the tightening of financial conditions and the slowdown in the world economy. .

The agreement is still subject to final approval by the Executive Board of the International Monetary Fund (IMF), which is scheduled to hold a meeting in the coming weeks, and once the review is complete, Argentina would have access to some 3.9 billion dollars, according to The multilateral organization reported in a statement.

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This quarterly review is part of the extended facility program (EFF) that the Argentine Executive and the IMF sealed at the end of March to refinance a loan of more than 40,000 million dollars.

SUPPORT FOR THE GOVERNMENT

The entity considered that “the recent and decisive” measures adopted by the Argentine government are helping to restore confidence and strengthen macroeconomic stability, in a country that has been going through serious monetary and fiscal imbalances for four years.

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Decisive policy implementation remains essential to consolidate macroeconomic stability and begin to address Argentina’s entrenched challenges, particularly high and persistent inflation.

The technical staff of the Fund and the Argentine authorities agreed that the objectives established in the approval of the agreement “will remain unchanged” until 2023, including those related to the primary fiscal deficit (2.5% of GDP in 2022) and net international reserves (5,800 million dollars for this year).

In this sense, the multilateral organization explained that the new macroeconomic framework reflects “a more difficult global environment” and the recent “pressures” of the internal market, which forced to correct upwards the inflation forecasts, which accumulated an increase of 56.4%. in the first eight months of the year, so it is on track to exceed the 52-62% range forecast for this year.

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However, “decisive actions” by the new economic team are dissipating market pressures, leaving the 4% growth outlook unchanged for this year, while contributing to a “gradual moderation” in inflation over the coming year. rest of 2022 and 2023.

Likewise, the IMF highlighted that most of the objectives of the quantitative program until the end of June were met, except for the lower accumulation of international reserves, as a result of the increase in imports and the “delays in external official support”.

MEETING IN NEW YORK

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The Argentine president, Alberto Fernández, held a face-to-face meeting in New York on Monday with the managing director of the IMF, Kristalina Georgieva, in which they discussed the “considerable progress” of their respective teams to reach a technical agreement on this second review. .

In a press appearance after the meeting, Georgieva highlighted the “full commitment” of the Argentine Government with the program agreed with the IMF, whose goals could undergo further modifications in the future.

“We must analyze the issue of goals based on the program, the progress and the conditions for implementation, taking into account the importance of anchoring the economy in the context of the program for the future,” said the head of the IMF.

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The Bulgarian economist also underlined the “strong team” of Argentine Economy Minister Sergio Massa, who took office on August 3 amid strong exchange and financial tensions and divisions in the ruling coalition.

“We have been able to verify an increase in terms of the authority that Minister Massa has managed to gather around his function (…). I think that Massa, precisely, is proof that the government is the owner of the (economic) program and the technical team of the IMF is there to continue offering its support in the future”, recognized Georgieva.

COMMITMENTS FOR 2023

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Last Thursday, the Argentine Government crystallized its commitment to the IMF through the 2023 Budget bill that it sent to Parliament for treatment and approval.

The budget, which estimates growth of 2% and inflation of 60% for next year, contemplates the fulfillment of the main goals with the IMF, such as the reduction of the fiscal deficit (1.9% of GDP), the contraction of aid currency to the Treasury (0.6% of GDP) or the accumulation of reserves.

In this framework, the Executive promised to continue “on the path of macroeconomic normalization through the premise of recovering the progressive strengthening of resources and guaranteeing fiscal order”, while deepening the stimuli for investment, production and employment.

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