Argentine authorities and staff from the International Monetary Fund reached a staff-level agreement on Tuesday. This marks the third evaluation of the Extended Fund Facility program established by the Milei administration with the lender in 2025. The new program unlocked a US$20 billion loan, which accumulates alongside a prior US$45 billion debt incurred by the country in 2018 during Mauricio Macri’s administration. The agreement, pending approval by the fund board to become official, paves the way for an additional US$900 disbursement for the Milei administration. In a statement announcing the news, the fund stated that “prudent fiscal and monetary policies have supported continued disinflation and substantially strengthened Argentina’s external position and buffers.”
The communique stated that trade, labour, investment, and capital markets reforms have facilitated a more “efficient and market-based economy, with export volumes now reaching new heights.” The document highlighted that Central Bank reserve purchases exceeded its June target by US$4 billion, noting that the annual reserve accumulation now stood at US$16 billion. It also praised the more than US$76 billion approved under the large investment incentive scheme (known as RIGI), which would “strengthen growth and job creation over time.” The lender said that it had reached an agreement with the government on a policy package that looked to “consolidate disinflation, further strengthen resilience, and enhance growth and employment.” The program is founded on four key elements.
The first is fiscal policy, which the IMF stated will remain “central” to the program, aligning with a primary surplus of 1.4 percent of GDP in 2026 and a comparable fiscal effort in 2027. “Continued expenditure discipline and reforms to the tax and fiscal frameworks will further consolidation efforts while protecting priority social and infrastructure spending,” read the text. The second element pertains to monetary policy. The Central Bank, the statement said, will continue to target money aggregates, calibrated to “support disinflation and reserve accumulation, while preserving exchange rate flexibility within the exchange rate band system.” Concerning the third element, reserves and financing strategy, the fund indicated that reserve buffers will persist in being fortified to improve “resilience.” This will be accompanied by a strategy that will continue to “mobilize financing from the domestic capital markets, official partners, and privatization receipts.”
“The authorities agreed to preserve readiness to access international capital markets when conditions permit and activate contingent credit lines as needed. Efforts to further extend maturities will continue.” The final item pertains to structural reforms. According to the statement, prioritising the deepening of domestic capital markets will involve expanding access to longer-term financing, facilitating investments under the RIGI framework, and advancing infrastructure concessions. “Together with labor and market reforms implemented earlier this year and continued macroeconomic prudence, these efforts are expected to strengthen growth and employment over time.”
