The International Monetary Fund (IMF) has reached a staff-level agreement with Argentina on the third review of its US$20-billion financing programme, potentially unlocking approximately US$900 million for President Javier Milei’s government.
The disbursement remains subject to final approval by the fund’s Executive Board, which is expected to consider the review in early December.
The 48-month Extended Fund Facility (EFF) arrangement was agreed in April 2025, as Argentina grappled with high inflation and currency depreciation. Since taking office in December 2023, Milei has pursued sweeping economic reforms centred on cutting public spending, deregulation and bringing inflation under control.
“The authorities’ Fund-supported programme continues to deliver impressive results, despite a more complex global backdrop,” the IMF said in a statement on Tuesday.
The fund praised the government’s fiscal and monetary policies, saying they had supported disinflation and “substantially strengthened Argentina’s external position and buffers."
Net international reserves exceeded the programme’s end-June target by approximately US$4 billion, according to the IMF. The Central Bank has purchased nearly US$16 billion in foreign currency so far this year, while the Treasury has raised more than US$5 billion in foreign currency through domestic markets.
The fund also highlighted US$76 billion in approved investments under the Large Investment Incentive Regime (RIGI), saying their execution was expected to strengthen economic growth and job creation.
The agreement commits the government to maintaining a primary fiscal surplus of 1.4 percent of gross domestic product (GDP) in both 2026 and 2027. The IMF said this would represent a fourth consecutive year of primary surpluses and overall fiscal balance if the targets were met.
Monetary policy will continue to focus on reducing inflation and accumulating reserves, while the central bank will preserve exchange rate flexibility within the existing currency band system.
The IMF also backed structural reforms in trade, labour, investment and capital markets, saying they were “enabling a more efficient and market-based economy.” Priorities include deepening domestic capital markets, expanding access to long-term financing and advancing infrastructure concessions.
The government’s spending cuts, implemented with IMF backing, have proved deeply unpopular and prompted repeated protests, while the benefits of stabilisation have yet to translate into a sustained recovery across the wider economy.
Consumer demand remains weak, and household debt defaults have risen sharply. Mortgage defaults have tripled over the past year to 12.8 percent, their highest level in two decades, according to figures cited in recent reporting.
The economic outlook has also deteriorated. In its October World Economic Outlook, the IMF cut its forecast for Argentina’s GDP growth in 2026 to 2.1 percent, from 3.5 percent previously, citing weaker-than-expected activity, subdued domestic demand and restrictive financial conditions. It also raised its inflation forecast to 32.5 percent.
Argentina remains the IMF’s largest debtor, owing the institution approximately US$56.8 billion. The latest disbursement would provide additional financing under the existing programme as the government seeks to consolidate its economic reforms and strengthen its financial position.
– TIMES/AFP/NA
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