IMF loans Argentina a further $5.7bn

30 Oct 18

The International Monetary Fund has approved an extra $5.7bn to help Argentina with its economic crisis.

The new loan, announced Friday, is part of the bailout package and brings the total assistance handed to the Latin American country since June to just over $20bn, after $15bn was paid out earlier this year.  

The country’s struggles were brought on by a loss of confidence in its currency in April. The peso has lost 50% of its value against the dollar since the start of the year.

President Mauricio Macri has already introduced a number of ‘emergency’ measures to deal with the economic woes, including cutting government ministries and raising export taxes.

IMF’s managing director Christine Lagarde said: “Despite the challenging environment the government has proactively strengthened its policy plans.

“Important challenges remain.”

She added that the government’s efforts and international support could “allow the country to return to macroeconomic stability”.  

On Thursday, Argentina’s lower house of Congress passed the government’s austerity budget, which will now go to the Senate for final approval.

People opposed to the austerity measures protested outside the Congress building while the budget was discussed. Many blame the IMF’s conditions for the austerity measures, which has seen thousands of public workers out of jobs and increases in transportation costs and utility bills.

Macri has also pledged to cut at least $10bn in health, education, science, transportation, public works and culture.  

Argentina’s budget deficit was 3.9% of GDP last year and the government has pledges to get it down to 2.7% in 2018 and zero by the end of next year.

The finance ministry has said the IMF agreement includes a commitment to maintain spending on social programmes at more than 1.2% of GDP to protect the most vulnerable sectors.

Almost 30% of the country’s population is living below the poverty line and unemployment stands at 9.6%.

Lagarde said: “The program continues to emphasise improving gender equality, protecting society’s most vulnerable, and laying the foundation for growth and job creation.

“The authorities have already taken measures to increase social assistance programs and have prioritised social assistance and childcare spending in the 2019 budget.”


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