Argentina and IMF agree on preliminary US$20 billion bailout deal

"IMF staff and the Argentine authorities have reached a staff-level agreement on a comprehensive economic programme that could be supported by a 48-month arrangement under the Extended Fund Facility (EFF) totaling US$20 billion (SDR 15.267 billion or 479 per cent of quota)," the fund said in a brief statement.

The deal is subject to approval by the IMF Executive Board, which is slated to consider it "in the coming days," the statement said.

"The agreement builds on the authorities' impressive early progress in stabilising the economy, underpinned by a strong fiscal anchor, that is delivering rapid disinflation and a recovery in activity and social indicators," the IMF said.

"The programme supports the next phase of Argentina's homegrown stabilisation and reform agenda aimed at entrenching macroeconomic stability, strengthening external sustainability, and unlocking strong and more sustainable growth, while also managing the more challenging global backdrop."

Argentina is the IMF's largest debtor and already owes the fund more than US$44 billion. The new loans are now to be used to cover interest payments to the IMF and to increase the central bank's currency reserves.

Argentina's right-wing libertarian President Javier Milei, who took office in December 2023, has initiated radical reforms. Thousands of civil servants were dismissed and social programmes were massively cut.

While his austerity measures significantly reduced inflation, they also stifled the economy and sparked mass protests across the country. In this once-affluent country, now more than 50 per cent of people live below the poverty line.

--BERNAMA-dpa