On Thursday, the (International Monetary Fund) IMF board approved Argentina’s request for an $800 million disbursement to aid its economic revival. This affirms that the lending scheme is progressing as planned.

Argentina is engaged in a $44 billion arrangement with the IMF, which includes economic objectives related to growth, inflation, and reserves. The IMF’s executive board has concluded the eighth assessment of this extended fund facility agreement, stating that all quantitative performance standards up to the end of March 2024 have been achieved with satisfactory margins.

To maintain this progress, the IMF emphasized the need for Argentina to enhance the effectiveness of fiscal adjustments, advance towards a more robust monetary and foreign exchange policy framework, and execute growth-oriented reforms.

IMF board
Image Source: the United Nations

The Argentine government has expressed its intention to initiate discussions with the IMF regarding a new scheme. This approval from the IMF follows the implementation of comprehensive fiscal reforms and significant reductions in government expenditure by President Javier Milei, who assumed office in December. These measures were aimed at addressing high inflation, a contracting economy, and negative reserves.

Under President Milei’s leadership, Argentina has managed to restore its exhausted foreign currency reserves, record fiscal surpluses at the beginning of the year, and stabilize the peso. In May, Argentina reported its lowest monthly inflation rate since 2022, at 4.2%, marking the fifth consecutive month of decline, thanks to Milei’s austerity measures.

However, the Argentine government is confronted with the challenge of a stagnant economy and increasing poverty rates. The IMF underscored the necessity for ongoing efforts to assist the vulnerable, expand political backing, and ensure responsive policymaking in Argentina’s future endeavors.

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