## Transcript of the IMF Virtual Press Briefing on the IMF and Argentine Authorities Staff-level Agreement on an Extended Fund Facility (EFF) _IMF News, March 3, 2022_ ## Source details **Canonical URL:** [Transcript of the IMF Virtual Press Briefing on the IMF and Argentine Authorities Staff-level Agreement on an Extended Fund Facility (EFF)](https://www.imf.org/en/news/articles/2022/03/04/tr03032022-argentina-transcript-press-briefing-staff-level-agreement-on-eff) ## Other formats - [Markdown version](/en/news/articles/2022/03/04/tr03032022-argentina-transcript-press-briefing-staff-level-agreement-on-eff/index.md) - [Structured JSON version](/en/news/articles/2022/03/04/tr03032022-argentina-transcript-press-briefing-staff-level-agreement-on-eff/index.json) - [Bundle manifest](/en/news/articles/2022/03/04/tr03032022-argentina-transcript-press-briefing-staff-level-agreement-on-eff/bundle-manifest.json) ## Bibliographic details - Published: March 3, 2022 --- ### Program overview - Staff-level agreement reached on an Extended Fund Facility (EFF) program with Argentina; program described as "pragmatic, realistic" and aimed at strengthening macroeconomic stability and addressing deep-rooted challenges to sustainable growth. - Requested IMF access: $45 billion. - Next procedural steps: - Memorandum of Economic and Financial Policies and related documents will be sent to the Argentine National Congress (legislative consideration required by Argentine domestic law). - IMF Executive Board will consider the request after the Argentine Congress deliberation (Executive Board has been briefed informally). ### Monetary policy and inflation strategy - Multi-pronged strategy to address persistent, high inflation includes: - Reduction of monetary financing of the fiscal deficit. - New framework for monetary policy implementation to deliver positive real interest rates to support domestic financing. - Expected effect: a steady decline in inflation over time, conditional on anchoring expectations and reducing inflation inertia. ### Inflation and GDP projections - Inflation: - End-of-period inflation in 2021: close to 51 percent. - Projected for 2022: a range of between 38 and 48 percent. - Additional decline of 5 percentage points from the 2022 level projected in '23, '24 in the medium-term. - GDP / Growth: - 2021: growth ended a bit over 10 percent (post-pandemic recovery). - 2022: growth expected to converge to a range of three and a half to four and a half percent. - Medium term: slowing further to a mid-point of three percent and over the medium term closer to two percent (Argentina's historical average). - Projections framed as ranges with acknowledged uncertainty due to unanchored inflation expectations and other risks. ### Fiscal path and public finance measures - Agreed primary fiscal deficit path: - 2022: primary fiscal deficit of 2.5 percent of GDP - 2023: primary fiscal deficit of 1.9 percent of GDP - 2024: primary fiscal deficit of 0.9 percent of GDP - 2025: primary fiscal deficit of 0 - Fiscal strategy elements: - Balanced revenue policies emphasizing progressivity, efficiency, and compliance. - Expenditure reforms to reduce untargeted subsidies and reorient spending toward productive social and infrastructure investment to support recovery and debt sustainability. - Reduction in monetary financing expected to help fiscal consolidation. ### Energy subsidy reduction - Targeted reduction in energy subsidies: 0.6 percent of GDP. - Design and implementation: - Reduction to be progressive (higher elimination for those with higher payment capacity; protection for lower-income segments). - Combination of cost-side measures and tariff increases implemented progressively. - Cost-side measures include actions such as plan gas initiatives and improving energy sector efficiency and conservation. - Joint work with the World Bank to develop a medium-term plan for the energy sector. - Baseline considerations and risks: - The 0.6 percent of GDP reduction is underpinned by assumptions on global energy prices and potential improvements in hydroelectricity; baseline projections are subject to risks tied to energy price evolution and Argentina's LNG imports. ### Currency controls, easing, and disbursement sequencing - Currency controls: - Program aims to improve the framework for currency controls to strengthen reserve accumulation and create conditions for an easing of controls over time. - Transition envisaged toward macroprudential regulation as controls are eased. - Disbursements: - Schedule of requested disbursements will be included in program documents and is subject to IMF Executive Board approval. - No specific first-disbursement amounts were published during the briefing; schedule will be detailed in the memorandum. ### External financing and multilateral support - Multilateral development banks (MDBs) involvement: - Engagements with IDB, World Bank, CAF to secure financing assurances and technical support (energy, social protection). - Expected MDB contribution: approximately 0.4 percent of GDP annually over the course of the program (net basis). - Note: 0.4 percent of GDP is net, implying larger gross flows and subsequent repayments. ### Political and procedural considerations - Documents publication timing: - Memorandum and accompanying documents will be published when they are sent to the Argentine Congress (unusual sequencing due to domestic law). - Congressional approval: - Program presentation to the IMF Executive Board follows Congressional consideration; IMF staff expressed confidence in authorities' political support but did not comment on domestic politics. - Timing risks: - Authorities and IMF staff are working to complete Congressional consideration in time to meet upcoming debt-service dates; potential delays were discussed but no waivers or specific contingency mechanisms were detailed in the briefing. ### Q&A highlights and key messages - Program rationale and credibility: - IMF staff emphasized realistic goals, pragmatism, and ownership by Argentine authorities as reasons the program should yield different results than past arrangements. - Revenue-side measures: - Continued revenue measures and tax compliance efforts are expected to support deficit targets; specific changes to export duties were not detailed. - Transparency and publication: - Full program documents will be published upon transmission to the Argentine Congress. *Transcript of the IMF Virtual Press Briefing on the IMF and Argentine Authorities Staff-level Agreement on an Extended Fund Facility (EFF), March 3, 2022 — IMF Communications Department* --- ## References - [Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm) - [Transcripts](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2022/03/04/tr03032022-argentina-transcript-press-briefing-staff-level-agreement-on-eff_