Argentina’s US$44-billion debt plan remains unchanged despite shocks, IMF says

The targets in Argentina’s recently minted US$44-billion agreement with the International Monetary Fund will remain unchanged even as some assumptions of the programme may be revised, according to one of the top officials at the Washington-based lender.

IMF Western Hemisphere Director Ilan Goldfajn said on Tuesday that the fiscal and monetary targets of the loan, which include reaching a balanced budget by 2025 and are the benchmarks to assess whether the deal is fulfilled, won’t be changed as the Argentina government focuses on executing the programme approved last month.

“The name of the game now is implementation,” Goldfajn told reporters at a briefing.

Argentine officials and IMF staff will hold a review of the programme in May, instead of June as originally planned, to judge the programme’s evolution and the impact of the global price shock from Russia’s invasion of Ukraine. Goldfajn said that other parts of the deal, such as the annual inflation estimate of between 38 to 48 percent this year, may be modified.

The programme was approved shortly after Russia’s war in Ukraine began and without taking into account the shock-waves on energy and food prices triggered by the conflict. Argentina’s inflation accelerated in March at its fastest monthly pace in 20 years, leading several economists to increase their forecast for annual price gains to over 60 percent by the end of 2022.

In response, the government announced new cash handouts for low income, informal workers and retirees that weren’t part of the IMF program. Goldfajn said that “protecting the most vulnerable” is a priority.

“The assumptions could change because of the new macro framework that comes from the global economy, new shocks,” the IMF official said. “Inflation is one of the assumptions.”