The Executive Board of the International Monetary Fund announced on Friday (03.31.2023) a disbursement of 5.4 billion dollars to Argentina, part of a 44 billion dollar loan program.
Argentina receives the largest assistance program that the IMF is currently applying for. The new disbursement brings to 28.9 billion dollars the total funds already allocated to Argentina since the start of the assistance program in March 2022.
Although lower than in 2021, Argentina registered economic growth of 5.2 percent in 2022. This would be the second consecutive year of expansion, the first two-year period of growth since 2010-2011. Inflation, however, remained high at 94.8%, preventing the country from reaping the benefits of this upturn in activity.
A week ago, Fitch Ratings downgraded Argentina’s foreign currency debt rating to one notch above default. The downgrade of the debt rating from CCC- to C suggests the rating agency believes default is “imminent,” coming shortly after a government decree requiring domestic public sector entities to swap their debt denominated in foreign currency for debt denominated in the national currency, the peso.
The Argentine president, Alberto Fernández, held a meeting two days ago in the Oval Office with the US president, Joe Biden, in which he thanked him for the US support for loans in multilateral credit organizations such as the IMF. The US is the nation with the highest voting rights in the IMF.
