Argentina: Third Review under the Stand-By Arrangement, Request for Waivers of Applicability of Performance Criteria, Financing Assurances Review, and Request for Modification of Performance Criteria-Press Release and Staff Report
IMF Staff Country Reports, April 5, 2019
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- Argentina: Third Review under the Stand-By Arrangement, Request for Waivers of Applicability of Performance Criteria, Financing Assurances Review, and Request for Modification of Performance Criteria-Press Release and Staff Report
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Bibliographic details
- Published: April 5, 2019
- Series: IMF Staff Country Reports
Executive summary and context
- Paper discusses Argentina’s Third Review under the Stand-By Arrangement, Request for Waivers of Applicability of Performance Criteria, Financing Assurances Review, and Request for Modification of Performance Criteria.
- Discussions focused on:
- risks to the fiscal position,
- how best to counter the rise in inflation and inflation expectations,
- how best to mitigate debt rollover risks,
- what more can be done to mitigate the impact of the economic downturn on the most vulnerable.
- Key status point: All end-March performance criteria and fiscal targets are expected to be met.
Recent macroeconomic developments and outlook
- Economic activity:
- The Argentina economy continues to contract, albeit at a modestly slower pace than had been expected under the program.
- Inflation dynamics:
- After a brief period of falling monthly inflation, price pressures and inflation expectations are again rising.
- Financial conditions:
- Financial conditions improved in January, with declining sovereign spreads and a rally in the local equity market.
- Those gains were largely erased later, with rising volatility in both currency and interest rates in March.
Major themes and risks identified
- Fiscal risks:
- Elevated risks to the fiscal position were a central concern in discussions.
- Inflation and expectations:
- A renewed rise in inflation and inflation expectations poses challenges to meeting program objectives.
- Debt rollover risks:
- Strategies to mitigate debt rollover risks were a core agenda item.
- Social impact:
- Measures to mitigate the impact of the economic downturn on the most vulnerable were emphasized.
Content in this bundle
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