Statement by IMF Staff Mission to Argentina

November 26, 2018

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

An International Monetary Fund (IMF) mission led by Mr. Roberto Cardarelli visited Argentina during November 9–16, 2018 to conduct discussions on the Second Review of Argentina’s IMF-supported program under the Stand-By Arrangement (SBA).

At the conclusion of the visit, Mr. Cardarelli issued the following statement:

“IMF staff and the Argentine authorities have reached a staff-level agreement on the second review of the economic program supported by the Stand-By Arrangement. Completion of the review is subject to the approval of the IMF’s Executive Board and would make available SDR 5.5 billion (about US$7.6 billion).

“We commend the authorities for their continued efforts to advance their economic reform program, including building political support for key budget legislation. Strong implementation of the government’s plan is essential to pave the way for a rebound of economic activity in 2019 and to support job creation, reduce poverty, and improve the living standards of all Argentines.

“The new monetary policy framework put in place by Banco Central de la Republica Argentina (BCRA) in October has been effective in stabilizing financial markets after the extreme volatility experienced in August and September. Steadfast implementation of its monetary policy framework and clear communication by the BCRA will continue to be essential to guide market expectations. The authorities’ commitment to a market determined exchange rate will strengthen the credibility of the framework and enhance resilience to external shocks. The authorities’ monetary policy framework gives the BCRA the option to begin a gradual process of FX reserve accumulation if the peso were to fall below the pre-announced non-intervention zone. Given their unsterilized nature, a proper calibration of such FX purchases will ensure that the monetary policy stance remains conducive to a rapid reduction of inflation and inflation expectations.

“Recent data suggest that achieving the 2018 fiscal target is well within reach. This and the passage of the 2019 budget point to the authorities’ clear commitment to address a key vulnerability of the Argentine economy. Eliminating the primary fiscal deficit is a necessary step to reduce the government financing needs and put the debt-to-GDP ratio on a downward path.

“Maintaining social spending identified in the program, and strengthening the social safety net, will be essential to shield the poor and vulnerable from the weakening of economic activity in the second half of 2018, and amid still elevated inflation. In this context, the decision to safeguard social assistance spending in the 2019 budget is welcome.

“The mission met with the Minister of the Economy Nicolas Dujovne, the Governor of the Central Bank Guido Sandleris, as well as other government officials and members of the private sector and civil society. The mission team wishes to thank the authorities and all other interlocutors for their warm welcome, constructive dialogue, and cooperative spirit during its latest visit to Argentina.”

IMF Communications Department

PRESS OFFICER: Maria Candia Romano

Phone: +1 202 623-7100Email: