MercoPress, en Español

Montevideo, February 23rd 2024 - 16:59 UTC



Argentina not to pay IMF maturities until after the elections

Friday, October 6th 2023 - 10:50 UTC
Full article
Inflation in Argentina “is expected to reach 120% year-on-year by the end of 2023,” the IMF said Inflation in Argentina “is expected to reach 120% year-on-year by the end of 2023,” the IMF said

Argentina will pay maturities worth US$ 2.6 billion to the International Monetary Fund (IMF) after the Oct. 22 presidential elections, it was reported Thursday in Buenos Aires. However, US$ 1.28 billion was due Friday, another US$ 640 million on Oct. 12, while a third payment of US$ 673 million was scheduled for the last working day of the month.

The latest IMF's so-called 'staff report' foresees Argentina should accumulate US$ 8 billion in reserves until the end of the year. The document also projects a GDP fall of 2.5% “due to the greater than expected impact of the drought and stricter macroeconomic policies during the rest of the year.”

As for inflation, “it is expected to reach 120% year-on-year by the end of 2023, although this will largely depend on the evolution of the exchange rate pass-through to prices and policy implementation” while “the trade balance is expected to gradually improve over the remainder of 2023, also supported by improvements in the energy balance following the completion of the first phase of the gas pipeline.”

The IMF study also explains that “the new policy package is expected to increase net international reserves by about [US]$8 billion between August and December.” The new target is far from the original program agreed with former Economy Minister Martin Guzman, to which Minister Sergio Massa objected that Argentina lost more than US$ 20 billion due to the drought, and precisely because of that, it needed reformulating. Because of the drought, Argentina sought to renegotiate a new program which took four months to greenlight the latest disbursement.

“The program has been diverted, reflecting the historic drought along with deviations and delays in policies and the end of June performance criteria for net reserve accumulation,” the Fund said.

IMF Western Hemisphere Director Rodrigo Valdés considered that dollarizing Argentina's economy as proposed by the presidential candidate Javier Milei does not replace the need for “a sustainable fiscal policy that leads to having debts that are not too high,” it was reported. “Something very important for us is that what one does in the monetary and exchange world does not substitute what is necessary to do in the fiscal world,” he added.

Categories: Economy, Politics, Argentina.
Tags: IMF, Inflation.

Top Comments

Disclaimer & comment rules

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!