The International Monetary Fund on Friday reached an agreement with the government that will smooth the release the next US$5.4-billion disbursement from its unprecedented US$56-billion loan programme.
The IMF board must approve the fourth review of the country's performance under the before Buenos Aires will have access to the funds. The board meeting is set for July 12.
"Argentina's economic policies are yielding results," acting IMF chief David Lipton – who is standing in for Christine Lagarde, who is set to take over the presidency of the European Central Bank – said in a statement, noting that the government achieved all the targets agreed with the fund including on budget policy and social spending.
"I fully support Argentina's efforts to bolster confidence, lay the foundation for sustainable growth and protect the most vulnerable."
While inflation remains high it "is expected to continue to fall in the coming months," Lipton said. "There are also signs that the economy is improving in the second quarter."
President Mauricio Macri has faced increasing pressure over the misfiring economy with presidential elections set for October in Argentina. The government imposed austerity measures as authorities struggled to stabilise the peso and rein in inflation to ensure access to IMF funding.
Argentina originally secured a US$50-billion financing package from the IMF in June 2018, before returning to the fund to ask for an additional US$6 billion and accelerated disbursements in exchange for tougher conditions.
In 2018, inflation totalled 47.6 percent in Argentina. With price increases until May already having hit 19 percent, IMF predicts the recession will persist until year-end, with a 1.2 percent contraction of the economy forecast.