MercoPress. South Atlantic News Agency

IMF admits new loan to Argentina under consideration

“A recovery in economic activity and real wages is now firmly underway” in Argentina, Kozack said

International Monetary Fund (IMF) Spokeswoman Julie Kozack admitted Thursday that “talks are underway” to grant Argentina a new loan. The South American country is reportedly eligible for such a disbursement given the impressive achievements of President Javier Milei's “chainsaw” adjustment policies. The program currently in force ends this year and Argentina still owes around US$ 1 billion.

“The authorities have formally expressed their interest in moving to a new program and negotiations are underway,” Kozack reckoned. The new program should contemplate the refinancing of the US$ 44 billion Argentina borrowed under then-President Mauricio Macri in 2018 which was redefined in 2022 and then adjusted in January this year.

“Our team continues in a constructive engagement and to address outstanding challenges the authorities expressed formal interest in moving forward on a new program and negotiations are underway,” Kozack said. Milei's administration is banking on these fresh funds to lift the currency exchange stocks and Economy Minister Luis Toto Caputo believes that the new understanding with the IMF will be finalized in the first four months of 2025.

“It is not unusual for the authorities to let an existing arrangement expire without completing all reviews while they are considering moving to a new IMF-supported program,” Kozack also explained.

“Over the past year since taking office, the Argentine authorities have continued to implement their economic stabilization program, and have achieved impressive results. These include a considerable reduction in inflation, fiscal surpluses, and improved coverage of international reserves,” Kozack noted.

“A recovery in economic activity and real wages is now firmly underway, with growth turning positive in the third quarter of this year,” she added. “I would like to emphasize that the authorities continue to implement their fiscal plan firmly and efficiently. The most recent data, as of November, indicate that they are currently running a primary surplus close to 2% of GDP,” she also pointed out.