- The IMF Executive Board completed the first review of Argentina's 48-month Extended Fund Facility (EFF), enabling a disbursement of about US$2 billion.
- Strong policy implementation has supported a smooth transition to a more flexible exchange rate regime, with declining inflation and continued economic growth.
- The Executive Board welcomed the authorities' commitments to safeguard the fiscal anchor, enhance the monetary framework, rebuild reserves, and further growth‑enhancing reforms.
Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed today the first review of the extended arrangement under the Extended Fund Facility (EFF) for Argentina. This marks an important early milestone under the program, which aims to further bolster public finances, reduce inflation, rebuild reserves, and lay the foundation for stronger and more sustainable private sector-led growth.
Despite a more challenging global backdrop, the Executive Board assessed that program implementation has been strong, reflecting appropriately tight policies. While the mid-June quantitative target for net international reserves (NIR) accumulation was missed, other key performance criteria and indicative targets were met, and corrective measures have been implemented to bring reserves closer to the NIR target. The Executive Board welcomed the authorities' commitment to implement policies consistent with the program's objectives.
The Board's decision enables an immediate disbursement of SDR 1.529 billion (about US$2 billion), bringing total disbursements under the arrangement to SDR 10.729 billion (about US$14 billion). Argentina's 48-month EFF arrangement, with access of SDR 15.267 billion (equivalent to US$20 billion, or 479 percent of quota), was approved on April 11, 2025 ( see Press Release No. 25/101 ).
Following the Executive Board discussion on Argentina, Ms. Kristalina Georgieva, Managing Director, issued the following statement:
"The new phase of Argentina's stabilization program, supported by the Extended Fund Facility arrangement, has had a strong start, despite a challenging external environment. Appropriately tight macroeconomic policies have facilitated a smooth transition to a more flexible exchange rate regime and the easing of most foreign exchange restrictions and controls. Disinflation has resumed, the economy has continued to expand, and poverty has fallen further. Notably, Argentina has re-accessed international capital markets earlier than anticipated, although spreads remain high.
"The zero-overall deficit target remains the key policy anchor. Spending discipline and controls are ensuring adherence to the authorities' objective of a 1.6 percent of GDP primary surplus for this year, while providing space for adequate social assistance to the most vulnerable. Looking ahead, fiscal consolidation should continue, underpinned by well-sequenced fiscal reforms, including in the tax area. Efforts to ensure any new tax or spending initiatives are fully funded remain important.
"Tight monetary conditions should continue to support disinflation and the re-monetization process underway. Refinements to the monetary framework should continue to improve liquidity management and mitigate interest rate volatility. Meanwhile, greater clarity regarding the medium-term monetary regime remains essential to further anchor disinflation.
"Exchange rate flexibility should be preserved, while sustained efforts continue to rebuild reserves buffers. This is critical to allow Argentina to better manage shocks and durably access international capital markets at more favorable terms.
"Ongoing efforts to deregulate the economy, reduce barriers to entry, and improve the governance and efficiency of the state should be deepened. Greater focus should be given to implementing well-sequenced reforms aimed at: (i) enhancing the labor market to promote formal employment and facilitate mobility; (ii) boosting foreign direct investment through the consistent and even-handed implementation of the large investment incentive scheme; and (iii) strengthening trade openness, including by further reducing distortive export taxes, as fiscal conditions permit.
"In the face of still-elevated risks, agile policy making and contingency planning remain essential to protect program objectives. Continued preparation and clear communication of policies, as well as well-targeted social support will be key to broadening the social and political consensus around the program."
