IMF asks Argentina for “stronger policies” in the face of crisis and drought

First modification: 04/02/2023 – 12:04

The International Monetary Fund (IMF) asked Argentina this Saturday to adopt “a stronger policy package” in the face of the economic crisis and historic drought that crosses the country, after transferring 5,400 million dollars

In the context of the severe drought, rising inflation and weak reserve coverage, “a stronger policy package is necessary to safeguard stability, address setbacks and ensure the objectives of the program,” the international organization said in a statement released this Saturday. .

On March 25, 2022, The IMF and the Argentine government agreed on a credit program under which the South American country receives 44,000 million dollars for 30 monthsof which it has already collected 28,900 million with the 5,400 turned in the last hours.

This agreement obliges the government of President Alberto Fernández to increase its international reserves and reduce the fiscal deficit, from 3% of Gross Domestic Product in 2021 to 2.5% in 2022, 1.9% in 2023 and 0.9% in 2024. In 2022, the deficit reached 2.3% of GDP and net international reserves increased by 5.4 billion dollars, above the target of 5 billion .

The Fund’s executive board concluded the fourth review of the agreement on Friday, allowing for the immediate disbursement of $5.4 billion, and also approved some “downward” adjustments in reserve accumulation targets due to the consequences of the drought. .

The organization estimates that the quantitative criteria until the end of December 2022 “were met with some margin.”

The drought that the country is experiencing, the worst since 1929, “has greatly complicated” the economy, explained Fernández, who claims to have obtained Biden’s support before international credit organizations.

The Fund wants the Argentine government to continue applying measures to eliminate energy subsidies for the wealthiest and for commercial users.

(With AFP)