MercoPress. South Atlantic News Agency

Argentina/IMF making “important progress” on reforms for loan package, but no specific timeline

IMF spokesperson Gerry Rice said the team in Buenos Aires had made “important progress” on the economic reforms needed

Argentina's budget proposal submitted this week is a key element in the reforms needed for a new loan package for the crisis-hit country, an International Monetary Fund spokesman said Thursday.

But there is still no timeframe for finalizing the aid, IMF spokesman Gerry Rice told reporters, repeating that the goal is to reach an agreement “in short order” to send to the IMF board.

The IMF said the team in Buenos Aires had made “important progress” on the economic reforms needed to strengthen the program supported by the Washington-based crisis lender.

Rice said draft budget submitted to Congress on Monday was “a fundamental part of the authorities' plan to strengthen their economic policies and to boost confidence.”

“We thought it very important that the proposed budget protects spending on social assistance and health programs,” Rice said. “We believe this is key in light of the economic challenges facing the country.”
But the austere spending plan was met by street protests.

The country's primary budget deficit has dropped from 6.0 percent in 2015 to 3.9 percent last year and is expected to reach 2.7 this year, according to the government.

Argentina's Finance Minister Nicolas Dujovne said fiscal balance is critical “to maintain economic order.”

The IMF and Buenos Aires agreed in June on a three-year, US$ 50 billion rescue lending program but Argentina has since asked for a more rapid disbursement, although Dujovne has denied the government is seeking additional funds.

Buenos Aires has received a US$ 15 billion disbursement but any changes in the program require the approval of the IMF board.

The objective remains “to reach rapid conclusion” to the negotiations and present a new plan to the IMF board as soon as possible, Rice said, but “I don't have a specific timeline.”

President Mauricio Macri is under increasing pressure as the peso has plunged -- despite intervention from the central bank -- and the recession worsens. He is also facing growing opposition from the public for seeking help from the IMF, which has a bitter history in the country and is blamed for past economic woes.