The board of directors of the International Monetary Fund (IMF) agreed to pay out around $4.7 billion this Wednesday to Argentina, to “support” the efforts of President Javier Milei’s government to restore “macroeconomic stability.”
Since taking office less than two months ago, Milei has devalued the peso by 50%, launched a price liberalization process and plans to change hundreds of regulations and laws to try to reverse a crisis in which more than 45% of Argentines live in poverty . with annual inflation of 211% in 2023.
The immediate disbursement of “around $4.7 billion” will make it possible to “support the authorities’ clear policy efforts to restore macroeconomic stability,” said a statement that Milei strongly supports, just at a time when the Congress debates a controversial reform package.
“An ambitious stabilization plan is being implemented to correct serious policy deviations in the last quarters of 2023,” when Alberto Fernández governed, he adds.
“The plan focuses on creating a strong fiscal anchor as well as measures to permanently reduce inflation, rebuild reserves and address long-standing distortions and problems,” he says.
But “the path to stabilization will be challenging,” warns the financial organization.
The panel’s approval of the seventh review of the loan agreement with Argentina increases the amount transferred to the South American country to around 40.6 billion as part of a 44 billion aid program.
The country is in crisis with foreign exchange shortages, high debt levels and virtually no access to international credit markets.
In its World Economic Outlook update on Tuesday, the IMF estimated that the country’s economic situation this year will be significantly worse than expected.
In October, the financial institution predicted that the South American country’s economy would grow by 2.8% in 2024, but would ultimately continue on a recessionary path with a contraction of 2.8%.
SOURCE: AFP