IMF board OKs Argentina loan program review, unlocking $4.7 billion

BUENOS AIRES — The International Monetary Fund (IMF) on Wednesday approved the most recent review of its $44 billion program with Argentina, allowing for the disbursement of $4.7 billion.

The fund said in a statement that even as key program targets were missed through the end of last year “due to severe policy setbacks,” it approved waivers of non-observance.

“Program targets were modified, in line with the authorities’ initial actions and ambitious plans to bring the program back on track,” the fund said.

The board also approved an extension of the program through Dec. 31, 2024, “along with some rephasing of planned disbursements within the existing envelope of the program.” The IMF did not supply more details on the changes.

The government and IMF staff recently agreed on the seventh review of the program, which was delayed amid a change of government as President Javier Milei took office on Dec. 10.

“The new administration is taking bold actions to restore macroeconomic stability and begin to address long-standing impediments to growth,” said IMF Managing Director Kristalina Georgieva in the statement.

She said that “inconsistent policies of the previous government” had left a “difficult inheritance.”

Earlier this week the IMF slashed its forecast for Argentina’s 2024 GDP to a 2.8% contraction from a previous view of a 2.8% expansion, mostly due to the expected effects of the new government’s proposed reforms.

Wednesday’s approval brings disbursements within the $44 billion program to $40.6 billion, the fund said.

The fund said following a recent devaluation and “exchange rate realignment,” the new policies should “continue to secure reserve accumulation goals.”