The World Bank has announced a US$2-billion guarantee for Argentina, which will enable the country to refinance its debt at a reduced cost, according to a statement released on Thursday. The administration of President Javier Milei faces the obligation of servicing private debt amounting to approximately US$4.3 billion in July. The guarantee, which remains subject to the approval of the World Bank’s board, was disclosed after a meeting in New York involving the organisation’s president, Ajay Banga, and Argentina’s Economy Minister, Luis Caputo. The loan is structured to be repaid over a six-year term, featuring a three-year grace period, and is nearly entirely supported by two entities of the World Bank: the International Bank for Reconstruction and Development and the Multilateral Investment Guarantee Agency, as reported 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 stated. Caputo expressed gratitude to Ajay and the team on X, sharing the announcement alongside a photograph with Banga. The World Bank articulated its “strong support for Argentina’s reform efforts to strengthen conditions for growth, investment and job creation.” Argentina is currently in discussions to obtain guarantees from the Inter-American Development Bank and the Development Bank of Latin America. These arrangements would enable the country to access financing from private banks at rates that are lower than the prevailing market rates, according to statements made by government officials to the local media.
The most recent data from the Central Bank indicates that Argentina possesses gross reserves amounting to US$45.627 billion. On Wednesday, specialists from the International Monetary Fund advised the release of an additional US$1-billion tranche as part of the nation’s 48-month lending programme. The approval of the Fund’s Executive Board remains a necessary step. The financing from the World Bank would be in addition to Argentina’s current US$20-billion program with the IMF and a distinct currency swap line with the US Treasury of the same magnitude.
The IMF acknowledged the condition of public finances; however, it indicated in a report on Tuesday that Argentina’s growth is projected to decline from 4.4 percent in 2025 to 3.5 percent this year, before rebounding to four percent next year. The international lender anticipates that the disinflation process in Argentina will persist, albeit “somewhat more gradually” than earlier projections suggested. The IMF had projected inflation at 16.4 percent for this year; however, it has now significantly revised that estimate to 30.4 percent.