## IMF Executive Board Approves 30-month US$44 billion Extended Arrangement for Argentina and Concludes 2022 Article IV Consultation _IMF News, March 25, 2022_ ## Source details **Canonical URL:** [IMF Executive Board Approves 30-month US$44 billion Extended Arrangement for Argentina and Concludes 2022 Article IV Consultation](https://www.imf.org/en/news/articles/2022/03/25/pr2289-argentina-imf-exec-board-approves-extended-arrangement-concludes-2022-article-iv-consultation) ## Other formats - [Markdown version](/en/news/articles/2022/03/25/pr2289-argentina-imf-exec-board-approves-extended-arrangement-concludes-2022-article-iv-consultation/index.md) - [Structured JSON version](/en/news/articles/2022/03/25/pr2289-argentina-imf-exec-board-approves-extended-arrangement-concludes-2022-article-iv-consultation/index.json) - [Bundle manifest](/en/news/articles/2022/03/25/pr2289-argentina-imf-exec-board-approves-extended-arrangement-concludes-2022-article-iv-consultation/bundle-manifest.json) ## Bibliographic details - Published: March 25, 2022 --- ### Program objectives and core policy measures - Fiscal and monetary framework: - Gradual elimination of monetary financing of the fiscal deficit. - Enhanced monetary and exchange rate policy framework intended to deliver positive real interest rates and a competitive real exchange rate. - Policies to strengthen the domestic peso debt market and encourage demand for peso assets. - Fiscal consolidation and public finance: - Sustained and growth-friendly fiscal consolidation aimed at strengthening debt sustainability. - Improve efficiency and transparency of government spending. - Improve the structure of spending by reducing costly and untargeted energy subsidies while expanding infrastructure spending. - Protect well-targeted social assistance programs and prudently manage wages and pensions. - Need to improve the efficiency, fairness, and compliance of the tax system. - Structural and inclusion measures: - Promote labor and gender inclusion. - Enhance sustainability and efficiency of key sectors, including energy. - Strengthen the investment climate by gradually removing economic distortions and providing a more predictable regulatory framework. - Improve governance, including boosting the efficiency and transparency of public spending and reinforcing the AML/CFT regime. - Conditionality and sequencing: - Actions aim to pave the way for an eventual, conditions-based, easing of foreign exchange controls. - Program includes steps to strengthen the central bank’s balance sheet and governance framework over the medium term. ### Executive Board and Managing Director statement - Managing Director Kristalina Georgieva: - 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. - Described the program as setting pragmatic and realistic objectives with credible policies to strengthen macroeconomic stability. - Emphasized importance of strong political and social consensus and medium-term commitment to sustain implementation. - Highlighted that risks are exceptionally high and that early program recalibration may be critical to achieve objectives. ### Executive Board assessment and policy guidance - Broad endorsement of program thrust; noted fragility aggravated by the pandemic and spillovers from the war in Ukraine. - Key priorities and recommendations from Directors: - Credible, sustained, and growth-friendly fiscal consolidation to strengthen debt sustainability and discontinue monetary financing. - End monetary financing and implement the enhanced monetary policy framework to deliver positive real interest rates. - 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. - Rebuild international reserves. - Protect and target social assistance while managing wages and pensions prudently. - Strengthen domestic peso debt market and the sustainability/efficiency of key sectors. - Improve investment climate and regulatory predictability, including in strategic sectors. - Strengthen governance and transparency of public spending; reinforce AML/CFT regime. - Risk recognition and program monitoring: - Program subject to exceptionally high risks; vulnerability to external shocks and implementation difficulties noted. - 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. - 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. - Medium-term view: - 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. - Some Directors recommended incorporating additional medium-term reforms into the current program to increase credibility. ### Selected economic and financial indicators (estimates and projections) - 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$12,873 - Gini coefficient (2011): 0.45 - National income and prices (Annual percentage change) - GDP at constant prices: 2021 Est. 10.2; 2022 Proj. 3.5 - 4.5; 2023 Proj. 2.5 - 3.5 - Consumer price index (eop): 2021 Est. 50.9; 2022 Proj. 38.0 - 48.0; 2023 Proj. 34.0 - 42.0 - External sector (Percent of GDP unless otherwise indicated) - Current account balance: 2021 Est. 1.3; 2022 Proj. 0.5; 2023 Proj. 0.4 - Trade balance: 2021 Est. 3.2; 2022 Proj. 2.4; 2023 Proj. 2.3 - Foreign direct Investment (net): 2021 Est. 1.1; 2022 Proj. 1.6 - Gross international reserves (US$ billions): 2021 Est. 39.7; 2022 Proj. 49.1; 2023 Proj. 51.5 - Change in Net International Reserves (US$ billions) 1/: 2021 Est. -1.5; 2022 Proj. 5.8; 2023 Proj. 4.0 - Terms of trade (percent change): 2021 Est. 9.4; 2022 Proj. -0.1; 2023 Proj. -4.1 - REER (avg., percent change): 2021 Est. 4.3; 2022 Proj. … - Federal government operations - Federal primary balance 2/: 2021 Est. -3.0; 2022 Proj. -2.5; 2023 Proj. -1.9 - Revenues: 2021 Est. 18.2; 2022 Proj. 18.6 - Primary expenditures: 2021 Est. 21.2; 2022 Proj. 20.7; 2023 Proj. 20.5 - Federal overall balance: 2021 Est. -4.5; 2022 Proj. -4.0; 2023 Proj. -3.4 - Federal government debt: 2021 Est. 80.6; 2022 Proj. 74.4; 2023 Proj. 74.3 - excluding intra public sector 3/: 2021 Est. 49.6; 2022 Proj. 47.8; 2023 Proj. 49.4 - Monetary operations - Monetary base: 2021 Est. 7.9; 2022 Proj. 7.5 - Monetary financing of the fiscal deficit: 2021 Est. 3.7; 2022 Proj. 1.0; 2023 Proj. 0.6 - BCRA securities: 2021 Est. 10.9; 2022 Proj. 9.3; 2023 Proj. 9.1 - BCRA quasi-fiscal cost: 2021 Est. 3.3; 2022 Proj. 2.9 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 exchange rate: (SDR 0.724951/US$). *IMF Executive Board press release, March 25, 2022.* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2022/03/25/pr2289-argentina-imf-exec-board-approves-extended-arrangement-concludes-2022-article-iv-consultation_