{
  "title": "Press Release: IMF Approves Augmentation of Argentina's Stand-By Credit",
  "publication": "IMF News, January 12, 2001",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr0103",
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  "summary": "The Executive Board approved an augmentation to SDR 10.6 billion (about US$14 billion) of Argentina's stand-by credit first approved on March 10, 2000.",
  "authors": [
    "Credit Press Release No."
  ],
  "publishDate": "2001-01-12",
  "sections": [
    {
      "heading": "Approval and Financial Support Package",
      "content": "- The Executive Board approved an augmentation to SDR 10.6 billion (about US$14 billion) of Argentina's stand-by credit first approved on March 10, 2000.\n- SDR 2.1 billion (about US$3 billion) of the augmented total will be provided under the Supplemental Reserve Facility (SRF).\n- SDR 2.25 billion (about US$3 billion) made available immediately following completion of the second review of Argentina's program.\n- Three additional drawings of SDR 976.2 million (about US$1.3 billion) each to be made available during the remainder of 2001 following further reviews, the first expected to take place towards the end of the first quarter.\n- Further credit scheduled, according to a schedule yet to be specified:\n  - 2002: SDR 3 billion (about US$4 billion)\n  - 2003: SDR 764 million (about US$1 billion)\n- Argentine authorities arranged a financial support package totaling about US$39.7 billion from official and private sources, which includes:\n  - About US$5 billion in new loan commitments from the Inter-American Development Bank and the World Bank.\n  - US$1 billion in a loan from Spain.\n  - About US$20 billion of financing from the private sector based on a market-based, voluntary approach."
    },
    {
      "heading": "IMF Statement and Program Objectives",
      "content": "- Stanley Fischer, First Deputy Managing Director and Acting Chairman of the Board, summarized the authorities' program aims:\n  - Promote economic growth and ensure medium-term sustainability of the fiscal and external financial situations.\n  - Restore confidence at home and abroad and protect the country's convertibility regime.\n- Program measures highlighted:\n  - Elimination of tax disincentives to promote investment, including phasing out the 15 percent tax on interest paid by enterprises by July 2002.\n  - Creation of a private sector infrastructure fund and an increase in public investment.\n  - Structural fiscal reforms including a new fiscal pact with the provinces, reform to the social security system, and measures to improve tax enforcement.\n  - Opening national health care to competition; deregulation and promotion of competition in energy and telecommunications; renegotiation of expiring contracts with privatized enterprises; elimination over two years of the 3 percent import surcharge; continued implementation of labor reform approved by Congress in May 2000.\n- Market reactions noted as positive: spreads on Argentine bonds and domestic interest rates declined significantly in recent weeks and the stock market rebounded strongly."
    },
    {
      "heading": "Program Summary and Projections",
      "content": "- Economic performance in 2000 was worse than expected; failure to recover from the recession since mid-1998.\n- Authorities' response: strengthen policy framework, accelerate structural reform efforts, maintain current convertibility regime, and promote recovery of investment as the foundation for domestic demand and output recovery.\n- New policy measures to stimulate investment include allowing partial deductibility of interest paid on new mortgage loans.\n- Growth and output projections:\n  - A gradual recovery in demand and output expected to begin in the first quarter of 2001.\n  - Average rate of GDP growth in 2001 projected at around 2 ½ percent.\n  - Investment projected to rise by nearly 6 percent in 2001, following a cumulative decline of 20 percent in 1999-2000.\n  - Consumer prices likely to remain flat reflecting the still large output gap and labor market slack.\n- External and fiscal objectives:\n  - Program aims at gradual reduction of the external account deficit, contributing to lowering external debt to GDP ratio below 50 percent by 2006.\n  - Authorities accept in the short run an only moderate reduction in the federal fiscal deficit to 2.2 of the projected GDP to avoid a strong contractionary fiscal impact.\n  - Commitment to medium-term fiscal sustainability: reform of the pension system and a fiscal pact with the provinces to attain budget balance at both the federal and the provincial level by 2005, at the latest."
    },
    {
      "heading": "Argentina: Selected Economic Indicators (Prel.)",
      "content": "- National income and prices (annual percentage change)\n  - GDP at current prices: 1996: 5.1; 1997: 7.6; 1998: 2.1; 1999: -5.2; 2000: 0.8\n  - GDP at constant prices: 1996: 5.5; 1997: 8.1; 1998: 3.8; 1999: -3.4; 2000: -0.2\n  - GDP deflator: 1996: -0.4; 1997: -0.5; 1998: -1.7; 1999: -1.9; 2000: 1.0\n  - Consumer prices (e.o.p.): 1996: 0.1; 1997: 0.3; 1998: 0.7; 1999: -1.8; 2000: -0.7\n- External sector (annual percentage change)\n  - Export volume: 1996: 6.7; 1997: 13.9; 1998: 11.6; 1999: 3.0; 2000: —\n  - Import volume: 1996: 19.6; 1997: 30.2; 1998: 4.0; 1999: -13.9; 2000: -1.0\n  - Terms of trade (deterioration -): 1996: 7.8; 1997: -1.2; 1998: -5.5; 1999: -5.9; 2000: 9.7\n- Money and credit (annual percentage change)\n  - Domestic credit (net): 1996: 9.8; 1997: 17.4; 1998: 10.7; 1999: 3.3; 2000: —\n  - Private sector deposits: 1996: 22.1; 1997: 27.0; 1998: 15.8; 1999: 2.8; 2000: 7.4\n- Interest rates (average)\n  - 31-60-day peso time deposits: 1996: 7.3; 1997: 7.0; 1998: 8.4; 1999: —\n  - 30-day peso prime rate: 1996: 10.5; 1997: 9.1; 1998: 10.6; 1999: 10.8; 2000: 11.0\n- National accounts (in percent of GDP)\n  - Gross domestic investment: 1996: 18.1; 1997: 19.4; 1998: 19.9; 1999: 17.9; 2000: 15.9\n  - Gross national savings: 1996: 15.7; 1997: 15.3; 1998: 15.2; 1999: 13.5; 2000: 12.6\n- Public finances (in percent of GDP)\n  - Federal government primary balance: 1996: -0.8; 1997: 0.4; 1998: 0.9; 1999: —; 2000: —\n  - Federal government overall balance: 1996: -2.5; 1997: -1.6; 1998: -1.3; 1999: -2.4; 2000: —\n  - Overall public sector: 1996: -3.2; 1997: -2.1; 1998: -4.2; 1999: -3.6; 2000: —\n- Current account (deficit -) and external debt (in percent of GDP)\n  - Current account (deficit -): 1996: -4.1; 1997: -4.8; 1998: -4.4; 1999: —\n  - External public debt: 1996: 25.5; 1997: 27.6; 1998: 30.0; 1999: 32.0; 2000: —\n  - Public sector external debt service1/: 1996: 33.8; 1997: 40.1; 1998: 35.3; 1999: 46.0; 2000: 46.6\n- Level and flow indicators (in billions of US dollars, unless otherwise stated)\n  - GDP (in billions of Arg$): 1996: 272.2; 1997: 292.9; 1998: 299.0; 1999: 283.2; 2000: 285.5\n  - Unemployment rate (percent): 1996: 17.2; 1997: 14.2; 1998: 12.9; 1999: 15.0; 2000: —\n  - Exports, f.o.b. (US$ billion): 1996: 24.0; 1997: 26.4; 1998: 23.3; 1999: 26.2; 2000: —\n  - Imports, c.i.f. (US$ billion): 1996: -23.9; 1997: -30.5; 1998: -31.4; 1999: -25.5; 2000: -25.3\n  - Current account of balance of payments (US$ billion): 1996: -6.4; 1997: -12.0; 1998: -14.3; 1999: -12.4; 2000: -9.9\n  - Overall balance of payments (US$ billion): 1996: 3.4; 1997: 3.6; 1998: 4.2; 1999: 1.8; 2000: —\n- Membership and IMF exposure\n  - Argentina joined the IMF on September 20, 1956.\n  - Its quota is SDR 2.117 billion (about US$3 billion).\n  - Its outstanding use of IMF credit currently totals SDR 2.232 billion (about US$3 billion).\n\nInternational Monetary Fund press release, January 12, 2001.\n\n---\n\n\n References\n\n- Argentina and the IMF\n- Press Releases\n- PRESS CENTER\n- Press Release 00/17\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr0103"
    }
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    "Authors: Credit Press Release No.",
    "Published: January 12, 2001",
    "The Executive Board approved an augmentation to SDR 10.6 billion (about US$14 billion) of Argentina's stand-by credit first approved on March 10, 2000.",
    "SDR 2.1 billion (about US$3 billion) of the augmented total will be provided under the Supplemental Reserve Facility (SRF).",
    "SDR 2.25 billion (about US$3 billion) made available immediately following completion of the second review of Argentina's program.",
    "Three additional drawings of SDR 976.2 million (about US$1.3 billion) each to be made available during the remainder of 2001 following further reviews, the first expected to take place towards the end of the first quarter.",
    "Further credit scheduled, according to a schedule yet to be specified:",
    "Argentine authorities arranged a financial support package totaling about US$39.7 billion from official and private sources, which includes:",
    "Stanley Fischer, First Deputy Managing Director and Acting Chairman of the Board, summarized the authorities' program aims:",
    "Program measures highlighted:",
    "Market reactions noted as positive: spreads on Argentine bonds and domestic interest rates declined significantly in recent weeks and the stock market rebounded strongly.",
    "Economic performance in 2000 was worse than expected; failure to recover from the recession since mid-1998.",
    "Authorities' response: strengthen policy framework, accelerate structural reform efforts, maintain current convertibility regime, and promote recovery of investment as the foundation for domestic demand and output recovery.",
    "New policy measures to stimulate investment include allowing partial deductibility of interest paid on new mortgage loans.",
    "Growth and output projections:",
    "External and fiscal objectives:",
    "National income and prices (annual percentage change)",
    "External sector (annual percentage change)",
    "Money and credit (annual percentage change)",
    "Interest rates (average)",
    "National accounts (in percent of GDP)",
    "Public finances (in percent of GDP)",
    "Current account (deficit -) and external debt (in percent of GDP)",
    "Level and flow indicators (in billions of US dollars, unless otherwise stated)",
    "Membership and IMF exposure",
    "[Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Press Release 00/17](https://www.imf.org/external/np/sec/pr/2000/pr0017.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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