The World Bank is preparing a US$2-billion guarantee for Argentina that would allow the country to refinance its debt at a lower cost, the institution announced on Thursday in a statement.
President Javier MIlei’s government has to meet private debt repayments of around US$4.3 billion in July.
The guarantee – which still requires approval from the World Bank’s board – was announced following a meeting in New York between the organisation’s president, Ajay Banga, and Argentina’s Economy Minister Luis Caputo.
The loan would be repayable over six years, including a three-year grace period, and would be almost fully backed by two World Bank institutions – the International Bank for Reconstruction and Development and the Multilateral Investment Guarantee Agency, reported Bloomberg on Thursday.
“The World Bank Group is working on a guarantee of up to US$2 billion to help refinance a relevant portion of Argentina’s debt, reduce financing costs, and create better conditions for increased flows of domestic and international private investment,” the institution said.
“Thank you Ajay and team,” Caputo wrote on X as he shared the announcement alongside a photograph with Banga.
The World Bank also expressed its “strong support for Argentina’s reform efforts to strengthen conditions for growth, investment and job creation.”
Argentina is also negotiating guarantees with the Inter-American Development Bank and the Development Bank of Latin America (CAF), which would allow it to secure financing from private banks at below-market rates, government officials told the local press.
According to the latest available Central Bank data, Argentina holds US$45.627 billion in gross reserves.
On Wednesday, experts from the International Monetary Fund (IMF) recommended disbursing a further US$1-billion tranche under the country’s 48-month lending programme. It must still be signed off by the Fund’s Executive Board.
The World Bank financing would come on top of Argentina’s existing US$20-billion IMF programme and a separate currency swap line with the US Treasury for the same size.
Although the IMF praised the state of public finances, it said in a report on Tuesday that Argentina’s growth would ease from 4.4 percent in 2025 to 3.5 percent this year, before picking up to four percent next year.
The international lender also expects the disinflation process in Argentina to continue, but “somewhat more gradually” than previously anticipated.
The IMF had forecast inflation of 16.4 percent for this year, but has now nearly doubled that estimate to 30.4 percent.
– TIMES/AFP/NA/BLOOMBERG
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