IMF approves second revision of the program with Argentina; allows disbursement of 3,800 million dollars

The directory of International Monetary Fund (IMF) approved on Friday the second review of the economic program with Argentina, for which it releases a disbursement of 3,800 million dollars, the entity reported in a statement.

The third largest economy in Latin America met the goals set in the agreement for 44,000 million dollars signed in March, regarding the accumulation of reserves of the central bank and the financing of the fiscal deficit, said the organism.

The managing director of the IMF, Kristalina Georgieva, affirmed that it is “fundamental” to achieve the objectives of reducing the primary fiscal deficit to 2.5% of GDP in 2022 and 1.9% in 2023 to continue with the accumulation of reserves, strengthen the sustainability of the debt and reduce reliance on the central bank to finance the deficit.

“This will require a strengthening of spending controls and greater efficiency in subsidies and social spending, which in turn would create a greater margin for energy infrastructure projects and assistance to vulnerable sectors,” he explained in the statement.

The organization, which with this disbursement of 3.8 billion dollars adds up to a total of 17.5 billion dollars delivered to the country, maintained that the recent measures taken by the Government were essential to stabilize the markets, restore confidence and ensure key quantitative objectives.

Despite IMF support, Argentina, a major grain producer, has been unable to contain high inflation, which has worsened since the war in Ukraine and has added greater uncertainty to its finances.

The agency trusts that compliance with the agreed fiscal and monetary policies will allow the country to gradually reduce its inflation rate.

“Through the implementation of lasting fiscal and monetary measures, the (exchange rate) gap and inflation can be reduced little by little, this is a process that will take time,” said an IMF source.

The government estimates that annual inflation in 2022 will close at 95%, while in 2023 it will slow to 60%.