IMF green lights $800 million for Argentina with program 'firmly on track'

[Betsy Ross]

More good news this week. $800 million coming to Argentina soon.

https://www.reuters.com/markets/imf-board-approves-review-argentina-unlock-800-million-2024-06-13/

 

[Avocado]

Key part of that article

Still, the government faces a challenge with the economy stalling and poverty levels rising. Continued efforts to support the vulnerable, broaden political support and ensure "agile" policymaking will be necessary in Argentina going forward, the IMF said.

 

[Digital Nomad]

Great news. Hopefully one day Argentina can get out of the cycle of depending on the IMF.

 

[Larry]

You left out some important footnotes.

The Board of Directors also believes that "it will be necessary to continue efforts to support the most vulnerable, expand political support and ensure agility in the formulation of policies."

El FMI aprobó desembolso de u$s800 millones, pero pidió mejorar política cambiaria y monetaria

"El programa sigue firmemente encaminado, habiéndose cumplido con margen todos los criterios cuantitativos de rendimiento para finales de marzo de 2024", indicó el organismo.

www.ambito.com

 

[GraceH]

Is the IMF generally disliked by Argentines? When I talk to people there they speak very negatively about them and blame them for their woes.

Seems like people always want to blame someone else for bad decisions. Without the IMF what other option would Argentine have had?

 

[Betsy Ross]

Is the IMF generally disliked by Argentines? When I talk to people there they speak very negatively about them and blame them for their woes.

Seems like people always want to blame someone else for bad decisions. Without the IMF what other option would Argentine have had?

I would say more Argentines than not have more of a negative view of the IMF even though it would have been impossible for the country without the massive loans. Some see the IMF as a necessary evil to get a stable economy. But many blame it for making tough because of austerity measures that they many times require. They typically always want countries to cut their budgets, cause job losses and sometimes causing poverty rates to go up.

Many Argentines I have talked to believe that IMF is more focused on debt repayment vs. truly helping the economy.

I don't know what other option Argentina would have had. People here seem to think they can magically just keep printing money and not cut budgets but that has proven to be a disaster over the years. President Milei of course is stopping all of that.

 

[Anchor Baby]

Yes in the short time we have been in the city we have heard many people bad mouthing the IMF and blaming it for Argentina's problems. My husband and I just laugh. Are locals really this delusional to believe this?

 

[Finance Prof]

Is the IMF generally disliked by Argentines? When I talk to people there they speak very negatively about them and blame them for their woes.

Seems like people always want to blame someone else for bad decisions. Without the IMF what other option would Argentine have had?

In general I have found that Argentines love to complain. Fact is IMF saved Argentina from getting worse. Without the IMF Argentina would have had to have printed even more money. Hyperinflation would have been inevitable. Much of the poverty that you are seeing today is due to Argentina not living within it's means. People want to blame someone and the IMF is that for many.

The austerity measures you see today are nothing if IMF didn't step in. If Massa won there would definitely be hyper inflation. That would have led to more poverty and most definitely social unrest. The value of the peso would have collapsed which maybe some expats like @Larry would have preferred but it would have been a horrible situation for Argentina.

The cutting of public spending, reducing subsidies and raising utility rates like you are seeing now they would have most definitely had to do that.

I laugh when people try to paint the IMF as the bad guy. Seriously what other option would Argentina have had? It was a total lifeline.

 

[earlyretirement]

In general I have found that Argentines love to complain. Fact is IMF saved Argentina from getting worse. Without the IMF Argentina would have had to have printed even more money. Hyperinflation would have been inevitable. Much of the poverty that you are seeing today is due to Argentina not living within it's means. People want to blame someone and the IMF is that for many.

The austerity measures you see today are nothing if IMF didn't step in. If Massa won there would definitely be hyper inflation. That would have led to more poverty and most definitely social unrest. The value of the peso would have collapsed which maybe some expats like @Larry would have preferred but it would have been a horrible situation for Argentina.

The cutting of public spending, reducing subsidies and raising utility rates like you are seeing now they would have most definitely had to do that.

I laugh when people try to paint the IMF as the bad guy. Seriously what other option would Argentina have had? It was a total lifeline.

Bingo. Exactly spot on target. I also laugh when people only criticize the IMF. It's not like Argentina had any other options. It was a total lifeline. It's a big positive that President Milei is forcing austerity measures. While painful and I think some of it is a bit too much too soon, Argentina had to get into the mindset of spending only what it can afford.

Austerity measures were inevitable with or without him.

 

[Larry]

Before Milei the estimate was that the economy would GROW 2.8% in 2024. After Milei the new prediction is that economy will FALL 3.5%.

 

[Betsy Ross]

Before Milei the estimate was that the economy would GROW 2.8% in 2024. After Milei the new prediction is that economy will FALL 3.5%.

View attachment 6508

@Larry you left out some parts.


Monday's International Monetary Fund (IMF) projected a 3.5% drop in Argentina's economic activity this year from a previous 2.75% assessment but admitted inflation would be lower than previously thought reaching 140% year-on-year by the end of 2024 in addition to “declining further in the medium term, as demand for pesos recovers from historically low levels.”

“Output will contract by around 3.5% in 2024, although a turnaround in activity is expected in the second half of this year as fiscal consolidation headwinds ease, real wages begin to recover and investment picks up in response to reforms,” the IMF's staff report also pointed out.

“Activity and demand have contracted sharply, although there are early signs that some sectors may be close to bottoming out,” the document also warned.

“Several indicators point to a possible stabilization of economic activity starting in April, including improvements in consumer confidence, a pickup in private credit and cement consumption, all in the context of a rebound in agricultural production following last year's drought,” the IMF also found.

“Meanwhile, reserves are expected to remain unchanged, as less favorable terms of trade are largely offset by higher net capital inflows,” the credit agency highlighted.

In addition, Argentina's return to international capital markets could happen late in 2025 or even earlier given the “sustained medium-term fiscal and external surpluses supported by tight policies, productivity gains, and structural improvements,” it was also explained after the IMF agreed to a US$ 800 million disbursement considering that Argentina's economic program under President Javier Milei continued “on track.”

If the South American country stays on this path, the exchange rate policy is expected to become more flexible shortly. In this regard, the IMF found that the 2% monthly devaluation “has helped anchor inflation.” Hence, monetary and exchange rate policies “will evolve to support disinflation and safeguard reserve accumulation.”

IMF: Argentina's economic activity projections worse than thought

Monday's International Monetary Fund (IMF) projected a 3.5% drop in Argentina's economic activity this year from a previous 2.75% assessment but admitted inflation would be lower than previously thought reaching 140% year-on-year by the end of 2024 in addition to declining further in the medium...

en.mercopress.com

 

[Johnny]

Hopefully things are bottoming out there there. The passing of the Omnibus should be great news and hopefully you can see the measures of that helping in the near future.

 

[Larry]

I think that Larry believes that this forum is full of uninformed, gullible gringos. 😀

There are a lot of uninformed gringos here.

IMF downgrades Argentina’s economic outlook for 2024

WASHINGTON, United States — The IMF sharply downgraded its 2024 economic outlook for Argentina on Monday, as the country implements a series of wide-ranging economic reforms under its new president,

business.inquirer.net

 

[Uncle Wong]

There are a lot of uninformed gringos here.

IMF downgrades Argentina’s economic outlook for 2024

WASHINGTON, United States — The IMF sharply downgraded its 2024 economic outlook for Argentina on Monday, as the country implements a series of wide-ranging economic reforms under its new president,

business.inquirer.net

I see some of your points Larry when I read some articles. I don't know enough about Argentina to know what is right or wrong but this article says another devaluation is inevitable which will cause inflation to go back up. It sounds like Argentina will need yet another bail out from the IMF or China.

Milei's anti-inflation drive pushes Argentina towards Brics

Argentina’s Javier Milei must have breathed a sigh of relief when he saw last week’s inflation data. It showed the first annualised decline since the President took a major gamble by allowing the peso to devalue late last year, with inflation falling from 292% in April to 276% in May. While the...

unherd.com