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Argentina’s $44bn Agreement Sees Somber Evaluation by the IMF
January 13, 2025
Argentina’s $44bn agreement with the IMF saw a critical evaluation by the latter, noting that it failed to stabilize the economy. This evaluation is a prerequisite for a new deal under IMF rules, with Argentina’s President Javier Milei’s administration to negotiate a third IMF program in seven years. Economy Minister Luis Caputo aims to secure an agreement by early 2025. The IMF’s review points to several key issues:
- Policy Missteps: The previous government’s economic policies were deemed inadequate, contributing to the program’s failure.
- Economic Decline: Despite substantial financial support, Argentina’s economic situation worsened, leading to an effective collapse of the program and crisis by late-2023.
- Program Design Flaws: The loan agreement’s structure and conditions were insufficient to address Argentina’s complex economic challenges.
Negotiations are ongoing, focusing on whether the IMF will provide additional funding and how Argentina will manage its currency and capital controls. While Milei’s austerity measures won praise, successful talks are still pending due to policy disagreements.
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