## IMF staff and the Argentine Authorities Reach Staff-Level Agreement on the Third Review Under the Extended Fund Facility Arrangement

_IMF News, December 3, 2022_

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**Canonical URL:** [IMF staff and the Argentine Authorities Reach Staff-Level Agreement on the Third Review Under the Extended Fund Facility Arrangement](https://www.imf.org/en/news/articles/2022/12/03/pr22414-argentina-staff-level-agreement-on-the-third-review)

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## Bibliographic details
- Published: December 3, 2022

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### Agreement outcome and procedural status
- IMF staff and the Argentine authorities reached staff-level agreement on the third review under Argentina’s 30-month EFF arrangement.
- The agreement is subject to approval by the IMF Executive Board, which is expected to meet this month.
- Upon completion of the review, Argentina will have access to about US$6 billion (SDR 4.5 billion).
- Argentina’s EFF arrangement, with access of SDR 31.914 billion (equivalent to US$44 billion, or about 1000 percent of quota), was approved on March 25, 2022.

### Macroeconomic assessment and recent program performance
- All quantitative performance criteria through end-September 2022 were met.
- Fiscal: Primary fiscal deficit outcomes benefited from strong expenditure controls and actions to improve the targeting of subsidies and social assistance.
- Debt and financing:
  - A debt restructuring agreement was reached with Paris Club creditors.
  - Efforts to mobilize net official financing have intensified.
- Inflation and trade:
  - Inflation is moderating (albeit from high levels).
  - Trade balance is improving, largely on account of a healthy slowdown in domestic demand and imports.
- Reserves and coverage:
  - Reserve coverage is being strengthened.
  - Net international reserves are programmed to increase by US$9.8 billion by end-2023.

### Key numeric program targets and projections (as stated)
- Primary fiscal deficit: reduction from 2.5 percent of GDP in 2022 to 1.9 percent of GDP in 2023.
- Annual inflation: gradual reduction from around 95 percent by end-2022 to 60 percent by end-2023.
- Net international reserves: programmed increase by US$9.8 billion by end-2023.
- Access upon review completion: about US$6 billion (SDR 4.5 billion).
- EFF arrangement access: SDR 31.914 billion (equivalent to US$44 billion, or about 1000 percent of quota).

### Policy recommendations and conditionalities emphasized
- Continue decisive policy implementation to further reduce macroeconomic imbalances, especially given a more challenging external and domestic backdrop (including the war in Ukraine).
- Fiscal consolidation:
  - Continue the fiscal consolidation process to achieve the targeted reduction in the primary fiscal deficit.
  - Underpin consolidation with efforts to continue to mobilize revenue, strengthen expenditure controls, and improve the timely targeting of subsidies and social assistance.
  - Preserve space for priority social and infrastructure spending.
- Monetary and FX policy:
  - Maintain a monetary and FX policy framework that delivers positive real policy interest rates and an improvement in external competitiveness.
  - Encourage demand for peso assets and ensure a reduction in monetary financing in line with program targets.
  - Support a gradual reduction in annual inflation from around 95 percent by end-2022 to 60 percent by end-2023.
- Domestic debt strategy:
  - Maintain a proactive domestic debt strategy to mobilize domestic financing and improve market functioning.
- External financing and FX measures:
  - Continue efforts to mobilize external financing; tighter macroeconomic policies should support further improvement in the current account balance.
  - Minimize temporary administrative FX measures going forward, since they are not a substitute for sound macroeconomic policy.
- Contingency:
  - Policies should be ready to adapt as needed if external and domestic risks materialize.

### Structural priorities
- Strengthen public financial management.
- Develop the peso government debt market.
- Improve AML/CFT frameworks.
- Enhance the net export potential of strategic sectors, particularly in energy.
- Conclude the forthcoming international information exchange agreement with the United States to support revenue mobilization and reserve accumulation.

### Other notable points
- Actions by the new economic team are starting to bear fruit.
- The authorities remain on track to meet the end-2022 program targets.
- The IMF team was led by Luis Cubeddu, Deputy Director of the Western Hemisphere Department, and Ashvin Ahuja, Mission Chief for Argentina.

*IMF staff and the Argentine Authorities Reach Staff-Level Agreement on the Third Review Under the Extended Fund Facility Arrangement — Press Release No. 22/414 (December 2, 2022)*

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## References

- [Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
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_Source: https://www.imf.org/en/news/articles/2022/12/03/pr22414-argentina-staff-level-agreement-on-the-third-review_