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ECONOMY | 03-12-2021 21:56

Upcoming IMF report assessing 2018 loan promises to stir up Argentine politics

IMF’s board set to discuss report reviewing the record stand-by programme worth US$57 billion granted to the Mauricio Macri government.

An upcoming report prepared by the International Monetary Fund assessing the multilateral lender’s record 2018 credit-line granted to Argentina looks set to reignite political debate on the subject.

The IMF’s board is preparing to discuss a report reviewing the record stand-by programme worth US$57 billion granted to the Mauricio Macri government at a meeting slated for December 22 this year.

This will be the Fund’s final evaluation of the loan and its conclusions, sources with direct knowledge of the proceedings told the Noticias Argentinas and Bloomberg news agencies on Friday.

This discussion is a key step in IMF procedure, which requires a review by the organisation’s staff (known as ‘Evaluation Ex-Post’) of the previous programme before any new one can be agreed. 

The report will include commentary by the current Argentine government, one of the sources revealed. 

An Economy Ministry official declined to comment, though an IMF spokeswoman confirmed that a discussion is expected to take place in the week beginning December 20.

The IMF is planning to make public, before the end of this year, its final evaluation of the credit (of which US$44 billion has been delivered) granted to the Macri government. Once the final evaluation is approved, it will be disclosed, staff said.

This report is avidly awaited in Argentina by both the government and the opposition with its contents promising to unleash a fresh political dispute over the country’s indebtedness and direction.

Even though the report has been under preparation for months, President Alberto Fernández took advantage of his speech to industrialists last Thursday to press the organism for that "evaluation" of a "failed" loan.

"We continue negotiating with the IMF with a sure step and a firm pulse. We want to reach an agreement which permits us to reschedule the huge debt repayments over the next three years to which the Macri government had committed us," underlined Fernández.

The Fund has already carried out similar evaluations for credit-lines granted to Ukraine and Greece. 

The aim is to unravel the reasons why the objectives established in the financial assistance programme were not met.

It is hoped that this "Evaluation Ex-Post" report would be the first formal explanation of the reasons for the failed financial assistance programme granted to Argentina in 2018.

The evaluation was decided by the IMF board in the framework of the requisites provided for "exceptional access" loans.

The IMF board said that it hopes to extract "lessons" for future loans from this work.

The report is being coordinated by Norwegian economist Odd Per Brekk, the second most senior official in the IMF’s Asia and Pacific Department. 

 

– TIMES/NA/BLOOMBERG

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