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Milei Wins IMF Approval To Secure $4.7 Billion Disbursement - Yahoo! Finance
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finance.yahoo.com
January 31, 2024
(Bloomberg) -- The International Monetary Fund’s executive board approved a $4.7 billion disbursement to the government of Argentine President Javier Milei, according to a statement Wednesday.
The payments are part of a refinanced $44 billion program, the lender’s largest, that was beset by uncertainty for months during the election campaign that saw Milei oust the Peronist government of Alberto Fernandez. The board’s decision Wednesday follows a staff-level agreement reached in Buenos Aires earlier this month.
“The new administration is taking bold actions to restore macroeconomic stability and begin to address long-standing impediments to growth,” IMF Managing Director Kristalina Georgieva said in the statement. “These initial actions averted a balance of payments crisis, although the path to stabilization will be challenging.”
Milei recently stripped the most important austerity measures — including key tax hikes — from a sweeping reform package in order to appease lawmakers. Economy Minister Luis Caputo nonetheless insists Argentina will still meet its goal of “deficit zero,” and a primary surplus this year equivalent to 2% of gross domestic product is one of the targets set by the IMF.
The IMF also wants Argentina to boost net foreign reserves to $10 billion by year-end. The Washington-based lender expects that Milei’s monetary policy stance will evolve in coming months as an initial currency devaluation of 54% ripples through the economy. The disbursement is more than the $3.3 billion initially expected and buys the new president time to honor debt repayments to the fund before deciding whether to continue with the current program brokered by his predecessor or negotiate a new one.
Milei’s cabinet chief, Nicolas Posse, traveled to Washington this week and met with the IMF’s No. 2, Gita Gopinath, Tuesday afternoon. Milei met Gopinath and IMF Managing Director Kristalina Georgieva at the World Economic Forum in Davos, Switzerland earlier this month.
“What this administration is doing is to very aggressively address some of the shortcomings we all see,” Georgieva said during a Bloomberg event at Davos. “Fiscal: out of whack — you spend more than you can afford. Reserves: wiped out. So we are seeing progress on all those fronts.”
The IMF sharply cut its growth estimate for Argentina on Tuesday, forecasting South America’s second-largest economy will shrink for two consecutive years as Milei pushes for a “significant policy adjustment.” The fund expects GDP will contract 2.8% this year as inflation soars.
2024 Bloomerg L.P.
Source:
Milei Wins IMF Approval To Secure $4.7 Billion Disbursement
(Bloomberg) -- The International Monetary Fund’s executive board approved a $4.7 billion disbursement to the government of Argentine President Javier Milei, according to a statement Wednesday. Most Read from BloombergDonald Trump Loses London Case Against Ex-MI6 Spy Over Kremlin DossierDeutsche...
January 31, 2024
(Bloomberg) -- The International Monetary Fund’s executive board approved a $4.7 billion disbursement to the government of Argentine President Javier Milei, according to a statement Wednesday.
The payments are part of a refinanced $44 billion program, the lender’s largest, that was beset by uncertainty for months during the election campaign that saw Milei oust the Peronist government of Alberto Fernandez. The board’s decision Wednesday follows a staff-level agreement reached in Buenos Aires earlier this month.
“The new administration is taking bold actions to restore macroeconomic stability and begin to address long-standing impediments to growth,” IMF Managing Director Kristalina Georgieva said in the statement. “These initial actions averted a balance of payments crisis, although the path to stabilization will be challenging.”
Milei recently stripped the most important austerity measures — including key tax hikes — from a sweeping reform package in order to appease lawmakers. Economy Minister Luis Caputo nonetheless insists Argentina will still meet its goal of “deficit zero,” and a primary surplus this year equivalent to 2% of gross domestic product is one of the targets set by the IMF.
The IMF also wants Argentina to boost net foreign reserves to $10 billion by year-end. The Washington-based lender expects that Milei’s monetary policy stance will evolve in coming months as an initial currency devaluation of 54% ripples through the economy. The disbursement is more than the $3.3 billion initially expected and buys the new president time to honor debt repayments to the fund before deciding whether to continue with the current program brokered by his predecessor or negotiate a new one.
Milei’s cabinet chief, Nicolas Posse, traveled to Washington this week and met with the IMF’s No. 2, Gita Gopinath, Tuesday afternoon. Milei met Gopinath and IMF Managing Director Kristalina Georgieva at the World Economic Forum in Davos, Switzerland earlier this month.
“What this administration is doing is to very aggressively address some of the shortcomings we all see,” Georgieva said during a Bloomberg event at Davos. “Fiscal: out of whack — you spend more than you can afford. Reserves: wiped out. So we are seeing progress on all those fronts.”
The IMF sharply cut its growth estimate for Argentina on Tuesday, forecasting South America’s second-largest economy will shrink for two consecutive years as Milei pushes for a “significant policy adjustment.” The fund expects GDP will contract 2.8% this year as inflation soars.
2024 Bloomerg L.P.
