The International Monetary Fund (IMF) has approved a new loan tranche of $4.7 billion for immediate disbursement to highly indebted Argentina. The IMF sees opportunities for the new government of Javier Milei to implement the necessary reforms.
The tranche is intended to support the “strong political efforts” of President Javier Milei’s new government to restore macroeconomic stability and get the program back on track.
Milei, who has been in power since December, won the elections with radical demands for an economic and political turnaround. There were major protests against his reform course and recently a general strike.
In 2018, the IMF provided Argentina with the largest loan in its history: $57 billion. With the tranche now approved, the loan money disbursed to date amounts to approximately $40 billion, the IMF announced on Wednesday.
The program deviated significantly from course
The program agreed at the time has since deviated significantly from course and reflects the inconsistent policies of the previous government, IMF Managing Director Kristalina Georgieva said, the statement said.
“Amid this difficult legacy – high and rising inflation, depleted reserves and high poverty rates – the new administration is taking bold action to restore macroeconomic stability and address long-standing barriers to growth.” Individual tranches will be released after technical reviews, during which Argentina must demonstrate that it is implementing the reforms required by the IMF.
Argentina has been in a serious financial and economic crisis for years. The inflation rate is 115 percent. The country suffers from a bloated state apparatus, low industrial productivity and a large shadow economy that deprives the state of much tax revenue. The national currency, the peso, continues to depreciate against the US dollar and the mountain of debt continues to grow. (saw/sda/awp/dpa)
Soource :Watson
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