{
  "title": "IMF Executive Board Approves 30-month US$44 billion Extended Arrangement for Argentina and Concludes 2022 Article IV Consultation",
  "publication": "IMF News, March 25, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/03/25/pr2289-argentina-imf-exec-board-approves-extended-arrangement-concludes-2022-article-iv-consultation",
  "canonical": "https://www.imf.org/en/news/articles/2022/03/25/pr2289-argentina-imf-exec-board-approves-extended-arrangement-concludes-2022-article-iv-consultation",
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  "summary": "Sources: National authorities and Fund staff estimates and projections. Notes: - 1/ TMU definition. - 2/ Primary balance excludes BCRA profit transfers. - 3/ Excludes federal government debt held by the BCRA and the Social Security Fund (FGS). - US dollar amounts were calculated using today’s exchan",
  "publishDate": "2022-03-25",
  "sections": [
    {
      "heading": "Program objectives and core policy measures",
      "content": "- Fiscal and monetary framework:\n  - Gradual elimination of monetary financing of the fiscal deficit.\n  - Enhanced monetary and exchange rate policy framework intended to deliver positive real interest rates and a competitive real exchange rate.\n  - Policies to strengthen the domestic peso debt market and encourage demand for peso assets.\n- Fiscal consolidation and public finance:\n  - Sustained and growth-friendly fiscal consolidation aimed at strengthening debt sustainability.\n  - Improve efficiency and transparency of government spending.\n  - Improve the structure of spending by reducing costly and untargeted energy subsidies while expanding infrastructure spending.\n  - Protect well-targeted social assistance programs and prudently manage wages and pensions.\n  - Need to improve the efficiency, fairness, and compliance of the tax system.\n- Structural and inclusion measures:\n  - Promote labor and gender inclusion.\n  - Enhance sustainability and efficiency of key sectors, including energy.\n  - Strengthen the investment climate by gradually removing economic distortions and providing a more predictable regulatory framework.\n  - Improve governance, including boosting the efficiency and transparency of public spending and reinforcing the AML/CFT regime.\n- Conditionality and sequencing:\n  - Actions aim to pave the way for an eventual, conditions-based, easing of foreign exchange controls.\n  - Program includes steps to strengthen the central bank’s balance sheet and governance framework over the medium term."
    },
    {
      "heading": "Executive Board and Managing Director statement",
      "content": "- Managing Director Kristalina Georgieva:\n  - Characterized Argentina’s situation as facing exceptional economic and social challenges: depressed per capita income, elevated poverty levels, persistent high inflation, a heavy debt burden, and low external buffers.\n  - Described the program as setting pragmatic and realistic objectives with credible policies to strengthen macroeconomic stability.\n  - Emphasized importance of strong political and social consensus and medium-term commitment to sustain implementation.\n  - Highlighted that risks are exceptionally high and that early program recalibration may be critical to achieve objectives."
    },
    {
      "heading": "Executive Board assessment and policy guidance",
      "content": "- Broad endorsement of program thrust; noted fragility aggravated by the pandemic and spillovers from the war in Ukraine.\n- Key priorities and recommendations from Directors:\n  - Credible, sustained, and growth-friendly fiscal consolidation to strengthen debt sustainability and discontinue monetary financing.\n  - End monetary financing and implement the enhanced monetary policy framework to deliver positive real interest rates.\n  - Maintain a competitive real exchange rate and adapt capital flow management over time to secure trade surpluses, encourage long term inflows, and boost reserve accumulation.\n  - Rebuild international reserves.\n  - Protect and target social assistance while managing wages and pensions prudently.\n  - Strengthen domestic peso debt market and the sustainability/efficiency of key sectors.\n  - Improve investment climate and regulatory predictability, including in strategic sectors.\n  - Strengthen governance and transparency of public spending; reinforce AML/CFT regime.\n- Risk recognition and program monitoring:\n  - Program subject to exceptionally high risks; vulnerability to external shocks and implementation difficulties noted.\n  - Spillovers from the war in Ukraine are materializing; Directors welcomed bringing forward the first program review and urged readiness to recalibrate policies to secure fiscal objectives and contain second-round inflationary effects.\n  - Elevated exposure to Argentina over an extended period creates major financial and reputational risks for the Fund; finely balanced judgements will be needed during program life.\n- Medium-term view:\n  - Beyond program period, further efforts required to cement stability: strengthen debt sustainability, bolster the central bank’s balance sheet and governance, and tackle regulatory barriers to productivity, investment, and formal employment.\n  - Some Directors recommended incorporating additional medium-term reforms into the current program to increase credibility."
    },
    {
      "heading": "Selected economic and financial indicators (estimates and projections)",
      "content": "- Population (2013): 41.5 million\n- Quota (current; millions SDR / % total): 2,117 / 0.89\n- Main products and exports: soybeans, automobiles, corn\n- Per capita GDP (2014): US$12,873\n- Gini coefficient (2011): 0.45\n\n- National income and prices (Annual percentage change)\n  - GDP at constant prices: 2021 Est. 10.2; 2022 Proj. 3.5 - 4.5; 2023 Proj. 2.5 - 3.5\n  - Consumer price index (eop): 2021 Est. 50.9; 2022 Proj. 38.0 - 48.0; 2023 Proj. 34.0 - 42.0\n\n- External sector (Percent of GDP unless otherwise indicated)\n  - Current account balance: 2021 Est. 1.3; 2022 Proj. 0.5; 2023 Proj. 0.4\n  - Trade balance: 2021 Est. 3.2; 2022 Proj. 2.4; 2023 Proj. 2.3\n  - Foreign direct Investment (net): 2021 Est. 1.1; 2022 Proj. 1.6\n  - Gross international reserves (US$ billions): 2021 Est. 39.7; 2022 Proj. 49.1; 2023 Proj. 51.5\n  - Change in Net International Reserves (US$ billions) 1/: 2021 Est. -1.5; 2022 Proj. 5.8; 2023 Proj. 4.0\n  - Terms of trade (percent change): 2021 Est. 9.4; 2022 Proj. -0.1; 2023 Proj. -4.1\n  - REER (avg., percent change): 2021 Est. 4.3; 2022 Proj. …\n\n- Federal government operations\n  - Federal primary balance 2/: 2021 Est. -3.0; 2022 Proj. -2.5; 2023 Proj. -1.9\n  - Revenues: 2021 Est. 18.2; 2022 Proj. 18.6\n  - Primary expenditures: 2021 Est. 21.2; 2022 Proj. 20.7; 2023 Proj. 20.5\n  - Federal overall balance: 2021 Est. -4.5; 2022 Proj. -4.0; 2023 Proj. -3.4\n  - Federal government debt: 2021 Est. 80.6; 2022 Proj. 74.4; 2023 Proj. 74.3\n  - excluding intra public sector 3/: 2021 Est. 49.6; 2022 Proj. 47.8; 2023 Proj. 49.4\n\n- Monetary operations\n  - Monetary base: 2021 Est. 7.9; 2022 Proj. 7.5\n  - Monetary financing of the fiscal deficit: 2021 Est. 3.7; 2022 Proj. 1.0; 2023 Proj. 0.6\n  - BCRA securities: 2021 Est. 10.9; 2022 Proj. 9.3; 2023 Proj. 9.1\n  - BCRA quasi-fiscal cost: 2021 Est. 3.3; 2022 Proj. 2.9\n\nSources: National authorities and Fund staff estimates and projections.\nNotes:\n- 1/ TMU definition.\n- 2/ Primary balance excludes BCRA profit transfers.\n- 3/ Excludes federal government debt held by the BCRA and the Social Security Fund (FGS).\n- US dollar amounts were calculated using today’s exchange rate: (SDR 0.724951/US$).\n\nIMF Executive Board press release, March 25, 2022.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/03/25/pr2289-argentina-imf-exec-board-approves-extended-arrangement-concludes-2022-article-iv-consultation"
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    "Published: March 25, 2022",
    "Fiscal and monetary framework:",
    "Fiscal consolidation and public finance:",
    "Structural and inclusion measures:",
    "Conditionality and sequencing:",
    "Managing Director Kristalina Georgieva:",
    "Broad endorsement of program thrust; noted fragility aggravated by the pandemic and spillovers from the war in Ukraine.",
    "Key priorities and recommendations from Directors:",
    "Risk recognition and program monitoring:",
    "Medium-term view:",
    "Population (2013): 41.5 million",
    "Quota (current; millions SDR / % total): 2,117 / 0.89",
    "Main products and exports: soybeans, automobiles, corn",
    "Per capita GDP (2014): US$12,873",
    "Gini coefficient (2011): 0.45",
    "National income and prices (Annual percentage change)",
    "External sector (Percent of GDP unless otherwise indicated)",
    "Federal government operations",
    "Monetary operations",
    "1/ TMU definition.",
    "2/ Primary balance excludes BCRA profit transfers.",
    "3/ Excludes federal government debt held by the BCRA and the Social Security Fund (FGS).",
    "US dollar amounts were calculated using today’s exchange rate: (SDR 0.724951/US$).",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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