International Monetary Fund (IMF) enters into $44 billion debt deal with Argentina.
the essentials in brief
- The IMF confirms a multi-billion dollar debt deal with Argentina.
- The deal is valued at $44 million.
- The Argentine parliament approved the agreement two weeks ago.
The Board of Directors of the International Monetary Fund (IMF) has approved a new debt agreement with Argentina. This amounts to around 44 billion US dollars (40.8 billion Swiss francs). The Argentine parliament approved the agreement around two weeks ago.
The IMF Board of Directors said on Friday that Argentina must now implement the agreed reforms “sustainably and steadily”. In this way, the economy can be stabilized and modernized with the help of structural reforms.
The agreement will provide Buenos Aires with a new loan of around 9.7 billion dollars (9 billion Swiss francs). This should stabilize the balance of payments.
International Monetary Fund: Loans are to be rescheduled
With the new IMF agreement, most of the existing loans are to be rescheduled. It replaces a contract from 2018, from which the majority of the liabilities would have fallen due this year and next. Given the sluggish economy and high inflation, Argentina would not have been able to cope. The government of the then liberal head of state Mauricio Macri had taken out the record loan.
Argentina is required to reduce its budget deficit from 3 percent in 2021 to 0.9 percent in 2024. According to the center-left government, social benefits and economic growth should not be affected. The IMF intends to review the consolidation progress on a regular basis.
But there were protests against the new agreement of the International Monetary Fund. During the votes in Parliament, several hundred people demonstrated against the agreement in front of the Senate building. In doing so, they followed the call from trade unions and left-wing organizations.
Argentina looks back on an extended period of recession, which was partly related to the corona pandemic. In the past year, however, economic activity picked up speed again. This with 10.3 percent growth in the first eleven months.
However, the inflation rate was extremely high at more than 50 percent, and inflation of 33 percent is expected for 2022. 40 percent of Argentina’s population lives in poverty.
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