He International Monetary Fund (IMF) announced this Monday that its technical staff has reached a agreement with Argentina on the eighth review of the aid packagewhich paves the way for the disbursement of almost 800 million dollars, in the midst of the second general strike in the country.
The Argentine president, Javier Milei, has been praised by the IMF for its plan, which has made it possible to advance faster than expected in the restoration of macroeconomic stability, with the first quarterly fiscal surplus in 16 years and a rapid drop in inflation.
However, this surplus has been achieved at the cost of thousands of layoffs and a deterioration in salaries and pensions, in a country affected by a strong economic recession and inflation that is close to 290% year-on-year.
The IMF also recognizes the Argentine government’s efforts to expand social assistance to vulnerable mothers and children, as well as to protect the purchasing power of pensions.
Despite these advances, protests in the streets have been constant since Milei took office last December with a spending cut plan.
However, the IMF says that an understanding has been reached on policies to continue the disinflation process and support economic recovery.
The agreement between the IMF and Argentina is subject to the approval of the board, which will meet in the coming weeks. Although the amount of the disbursement has not been specified, it is expected to be close to the $800 million agreed upon in the program.
IMF experts and the Argentine economic team have also set goals to advance additional reforms, including the goal of reaching equilibrium without net central bank financing and reducing subsidies.
Milei seeks to lift the exchange rate, but to do so it will need an additional 15 billion dollars.
Although the IMF has not mentioned plans to lend more money, it is confident that current reforms will help shore up the economic recovery and resolve obstacles to growth.
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