IMF unlocks $4.7bn for Argentina amid economic crisis, Milei austerity cuts

Inflation has crossed 160 percent in Latin America’s third-biggest economy, with 40 percent of population living in poverty.

Argentina and the International Monetary Fund (IMF) have finalised an agreement to release $4.7bn as part of a debt restructuring plan for the troubled South American nation.

Latin America’s third-biggest economy is facing dire economic challenges after decades of debt and financial mismanagement, with inflation surpassing 160 percent year-on-year and 40 percent of Argentinians living in poverty.

“Understandings were reached on a strengthened set of policies to restore macroeconomic stability and bring the current program back on track,” the IMF said in a statement on Wednesday.

With this deal, Argentina’s new President Javier Milei, who took power in December and inherited a deep social, economic and financial crisis, puts back on track a $44bn bailout package with the IMF that dates back to 2018.

“The new administration is already implementing an ambitious stabilization plan, anchored on a large upfront fiscal consolidation, along with actions to rebuild reserves, correct relative price misalignments, strengthen the central bank’s balance sheet, and create a simpler, rules-based, and market-oriented economy,” the IMF said.