The IMF, in a simultaneous statement, stressed that the agreement is about "a pragmatic and realistic program, with credible economic policies to strengthen macroeconomic stability and meet the challenges (...) of Argentina in terms of growth durable", "persistently high inflation" (50.9% in 2021), and "credible improvement in public finances".

Obtained "after intense negotiations", according to Argentina, the agreement concretizes the pre-agreement which had been announced at the end of January by the two parties and had paved the way for several weeks of in-depth negotiations between technical teams.

It provides for staggered debt repayments, after a "grace period", from 2026 to 2034 in return for several macroeconomic objectives for Argentina, including a gradual reduction in its budget deficit (currently 3% of GDP) aimed at 0.9% in 2024, indicates for its part the Argentine government in a press release.

The program resulting from the agreement, welcomes the government, contributes to "conditions of stability necessary to meet the existing structural challenges and strengthen the foundations for sustainable and inclusive growth".

Argentina returned to growth in 2021 (+10.3%) after three years of recession.

The agreement must be presented to the Executive Board of the IMF and to the Argentine Parliament for approval.

The Chamber of Deputies should start examining the agreement next Monday, according to the chairman of the Budget Committee.

The approval of the macro-economic policies reflecting the agreement could not be a piece of cake for the Argentinian government: the coalition (center-left) in power does not have a majority either in the Senate or in the Chamber of Deputies, even if in each authority it constitutes the most important parliamentary group.

The finalization of the agreement between technical teams, however, consolidates the lifeline provided by the January pre-agreement for Argentina, South America's third-largest economy, which was faced from 2022, then again in 2023, with repayment deadlines of around 19 billion dollars, absolutely “unpayable” according to the government.

This colossal debt was the legacy of a loan taken out in 2018 by the previous center-right Argentinian government of Mauricio Macri.

© 2022 AFP