May 13, 2024
PRESS OFFICER: Jose de Haro
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington DC: An International Monetary Fund (IMF) team, led by Luis Cubeddu, Deputy Director of the Western Hemisphere Department and Ashvin Ahuja, Mission Chief for Argentina, issued the following statement in Washington DC, today following conclusions of discussions on the eighth review of the Extended Fund Facility (EFF) arrangement for Argentina[1]:
“Building on the better-than-expected performance in the first quarter—all performance criteria were met with margins—IMF staff and the Argentine authorities reached understandings on policies to continue to entrench the disinflation process, rebuild external buffers, support the recovery, and keep the program on track. This agreement is subject to continued implementation of agreed policy actions and approval by the IMF Executive Board, which is expected to discuss it in the coming weeks. Upon completion of the review, Argentina would have access in line with the program.
Background
“Despite inheriting a very challenging economic and social situation, the authorities’ decisive implementation of their stabilization plan—based on a strong fiscal anchor, no monetary financing, and initial relative price corrections—has resulted in faster-than-anticipated progress in restoring macroeconomic stability and bringing the program firmly back on track. Notable results include the first quarterly fiscal surplus in 16 years, rapidly falling inflation, a turnaround in international reserves, and sovereign spreads near multi-year lows. In parallel, and against the backdrop of a contraction in economic activity, which began in late-2023, the authorities have made significant efforts to scale up social support for vulnerable young mothers and children and protect the purchasing power of pensions. Progress continues in broadening the political and societal support for these efforts and in tackling vested interests.
Key understandings
“Building on this strong progress, the authorities have indicated that their policies will continue to evolve to safeguard the durability of the stabilization and reform plan, recognizing the long and difficult road ahead. In this context, understandings were reached on policies to build on the gains made so far.
“IMF staff thanks the Argentine authorities, led by Minister Caputo and Central Bank President Bausili for their ongoing constructive engagement, as well as their strong ownership and commitment to restoring economic stability and setting the basis for a more sustainable and vigorous private sector-led economy that benefits all Argentines.”
[1] IMF Executive Board Approves 30-month US$44 billion Extended Arrangement for Argentina and Concludes 2022 Article IV Consultation
