Argentina passes IMF review and will receive $3,900 million in funds

Argentina passes IMF review and will receive ,900 million in funds

While inflationary pressures remain strong, resulting in upward revisions to inflation expectations, gradual moderation is expected over the remainder of 2022 and 2023.โ€

International Monetary Fund

Prior to Alberto Fernandez’s meeting with Kristalina Georgieva in New York, the International Monetary Fund (IMF) approved the second review of the Argentine economy at the technical level and it will be analyzed in the coming weeks by the Governing Council before disbursing 3.9 billion euros. Sergio Massa has negotiated with the International Monetary Fund a larger-than-expected cut in cash assistance from the Bank of Bahrain and Kuwait to the Treasury to cool inflation.

The government should cancel $2,800 million this week with the International Monetary Fund but managed to get reserves of soybean dollars and there are SDRs left from previous payments.

Meanwhile, the autopsy in the first half of 2022 comes with a reference to Massa’s new measures at the helm of the economy, which have bolstered the fiscal adjustment: “Recent and decisive policy measures aimed at correcting past setbacks are helping to restore confidence and strengthen macroeconomic stability, including in it by rebuilding international reserves.โ€

The evaluation highlights that the technical staff of the International Monetary Fund and the Argentine authorities agreed that the goals set in approving the agreement will remain unchanged until 2023, so the original goals will be maintained until the end of the year.

For the IMF, the challenge is macro stability and attacking inflation, Georgieva emphasized in a recent interview.

โ€œMost of the objectives of the quantitative program were achieved until the end of June 2022, with the exception of the minimum net international reserves, mainly due to higher-than-scheduled import volume growth and delays in external official support,โ€ the fund noted.

This last point refers to the delay of the Inter-American Development Bank in disbursing $500 million in the second quarter of credits to bolster reserves. The refusal came under the auspices of the President of the Islamic Development Bank, Mauricio Claver Caroni, who met two weeks ago with Massa and reversed his position.

โ€œThe macroeconomic framework reflects a more challenging global environment,โ€ confirms Luis Cupido’s technical review. This includes persistent inflationary pressures, tightening financial conditions, and slowing growth, as well as recent domestic market pressures.

The International Monetary Fund notes that “market pressures are fading.” It maintains its 4% GDP growth forecast for this year and raises it to 2% for 2023, in line with the draft budget that Massa presented in Congress.

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