Argentina ratifies commitment to IMF program ahead of key vote

Buenos Aires, 22 Mar Argentine President Alberto Fernández confirmed on Tuesday, in a conversation with the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, his Government's commitment to the new program agreed with the organization that will be voted on next Friday at the directory of the Fund. As reported by the Argentine Government via Twitter, Fernández had a “constructive” conversation with Georgieva in which the two “reaffirmed the importance” of the new extended facilities program that will allow Argentina to refinance debts with the agency of about $45 billion. The new agreement, reached this month between Fernández's government and the Fund's “staff” after negotiations opened in 2020 and already endorsed by the Argentine Parliament, will only enter into force once approved by the IMF board, which will meet on Friday to discuss it. As reported by the Argentine Executive, Fernández emphasized in the dialogue with Georgieva the “firm and determined commitment to meeting the objectives” of the new program to ensure that Argentina “underpins the ongoing economic recovery and strengthen the conditions to reduce inflation in a sustainable way.” “In this regard, the president stressed that the objectives of the program are those of the Government,” Casa Rosada said in a statement. “BROAD SUPPORT” The new understanding was approved by both chambers of the Argentine Parliament thanks to the support of Juntos for Change, Argentina's main opposition front, as the ruling party voted divided because the sector responding to Argentine Vice President Cristina Fernández has expressed its rejection of the agreement by claiming that it will involve a strong economic fit. However, in his conversation with Georgieva on Tuesday, Alberto Fernández remarked that the program has received “broad parliamentary and social, academic, trade union and union support”. “The agreement will allow a responsible and passable path for our country with greater predictability, certainty and vision of the future, in an international context that presents profound challenges due to the war scenario. And it reaffirms Argentina's absolute commitment not to postpone its economic growth with social justice,” the statement said. The new program foresees total disbursements of about $45 billion so that Argentina can meet the heavy maturities with the organization itself between this year and 2024 resulting from the “stand by” agreement signed in 2018, during the Government of Mauricio Macri (2015-2019). Among its main objectives, the new program seeks to tackle Argentina's persistent high inflation (50.9% in 2021) through a multiple strategy that involves a reduction in monetary financing of the fiscal deficit and a new monetary policy framework, with positive real interest rates to support financing to the Treasury. through the domestic market. It also establishes a gradual reduction in the primary fiscal deficit, from the equivalent of 3% of gross domestic product (GDP) in 2021, to 2.5% this year, 1.9% in 2023 and 0.9% in 2024, a goal that will force Argentina to reduce energy subsidies and increase tax revenue, among other measures.