The International Monetary Fund (IMF) announced this Friday that its technical staff reached an agreement with the Argentine government on the fifth and sixth revision of the aid package to the South American country, which paves the way for the disbursement of 7,500 million dollars.
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In 2022, the IMF and the Argentine government agreed on a credit program under which the South American country receives 44,000 million dollars at 30 months in exchange for Argentine President Alberto Fernández increasing his international reserves and reducing the fiscal deficit, from 3% of Gross Domestic Product in 2021 to 2.5% in 2022, 1.9% in 2023 and 0.9% in 2024.
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Since March 31, when the fourth review was completed, “Argentina’s economic situation has become very challenging” and “key program objectives through the end of June were not met due to the larger-than-expected impact of the drought, as well as policy diversions and delays”warns the background.
The agreement “will give Argentina access to around USD 7.5 billion” but is subject to the government applying the agreed measures and the approval of the board of directors, which will meet during the second half of August, the statement said.
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“A policy package has been agreed with a sequential set of measures to rebuild reserves and improve fiscal sustainability, while protecting critical infrastructure and social spending,” details the financial organization after weeks of negotiations.
A policy package has been agreed with a sequential set of measures to rebuild reserves and improve fiscal sustainability.
The situation of the Argentine economy is worrisome, with year-on-year inflation of over 110% and poverty of 40%, according to the official statistical institute Indec.
In addition, the government of President Alberto Fernández estimated that the global loss due to the drought in Argentina will be around 20,000 million dollars this yearalmost 3% of the Gross Domestic Product.
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The agreement is subject to the continued implementation of the agreed policy actions.
Once the fifth and sixth reviews are completed, Argentina will have access to around $7.5 billion.
‘Tranquillity’
The Argentine Minister of Economy, Sergio Massa, affirmed this Friday that the technical agreement reached between the IMF and the South American country gives “tranquility” in the current electoral context.
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“(The agreement) allows us to go through the second part of the year, which is obviously marked by electoral issues, sometimes generating uncertainty or doubts, with much more peace of mind, so for us it is very good news,” said the also presidential candidate. of Argentina in a statement released by his ministry.
Massa, who is in San Juan (northwest of the country) in full campaign towards the primary elections, which are held on August 13 and in which his candidacy for the presidential elections in October must be ratified, reiterated that This agreement grants Argentines “the peace of mind that one of the things that the ‘staff’ approves of is the power and capacity of the Central Bank to intervene”.
This statement alludes to the “stability” that, in the minister’s opinion, gives “those who produce” and “those who have to look at their perspective of price and profitability” the possibility of having financial dollars, as well as “the accumulation of reserves ” for “those who import and need intermediate goods”.
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The head of the Economy portfolio once again attacked the previous Administration, that of Mauricio Macri (2015-2019), which in 2018 contracted a debt with the Fund for 45,000 million dollars “to finance the exit of what it was at that moment was the ‘carry trade’ of investment funds in the United States”.
He also talked about that The opposition “tried to block the agreement” in terms of attacking the government, “without thinking that all Argentines are on board this ship”.
“It is a very serious mistake because when it comes to governing Argentina, those who govern and those who oppose must have responsibility. The best way to build order, the best way to give people peace of mind, is that who we are, the Government and Those who are in the opposition have responsibility,” he added.
INTERNATIONAL WRITING
*With information from AFP and EFE
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