Argentina: Fourth Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Modification of Performance Criteria, Waiver for Nonobservance of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Argentina

IMF Staff Country Reports, April 3, 2023

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Canonical URL: Argentina: Fourth Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Modification of Performance Criteria, Waiver for Nonobservance of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Argentina

Presents Argentina’s Fourth Review under the Extended Arrangement under the Extended Fund Facility (EFF), Requests for Modification of Performance Criteria, Waiver for Nonobservance of Performance Criteria, and Financing Assurances Review.
Emphasizes that achieving the 2023 primary fiscal deficit target of 1.9 percent of gross domestic product remains essential to support disinflation and reserve accumulation, alleviate financing pressures, and strengthen debt sustainability.
Notes that timely implementation of high-quality measures—particularly improving the targeting of energy subsidies and social assistance—will help offset lower export taxes due to the drought, protect priority infrastructure and social spending, and secure the fiscal targets.

2023 primary fiscal deficit target: 1.9 percent of gross domestic product.
Priority measures highlighted:
- Improve targeting of energy subsidies.
- Improve targeting of social assistance.
- Protect priority infrastructure spending.
- Protect priority social spending.
Objective of measures: offset lower export taxes due to the drought and secure fiscal targets.

Guidance: “Real interest rates should remain sufficiently positive to tackle high inflation and support demand for peso assets."
Domestic financing considerations:
- Prudent efforts needed to mitigate near-term rollover risks.
- Mobilize net financing while limiting the build-up of vulnerabilities and protecting debt sustainability.

Export tax revenues negatively affected by drought.
Nonobservance of performance criteria addressed via request for waiver.
Financing assurances review included to assess funding prospects and conditionality.

Subject: Environment, Foreign exchange, Imports, Inflation, International organization, International trade, Monetary policy, Natural disasters, Prices, Public debt
Keywords: financing strategy, Global, Imports, Inflation, Natural disasters, nonobservance of the performance criteria, pension moratorium, step-up interest rate structure, waiver of nonobservance