Argentina's Senate is holding its last debate on Thursday to approve a new agreement with the International Monetary Fund for 45 billion dollars, with which it will ward off the specter of default and try to curb the runaway inflation of more than 50% per year.
This loan will serve to restructure the stand-by program received in 2018 under the government of liberal Mauricio Macri, whose maturities of about $19 billion this year, another 20 billion in 2023 and 4 billion more in 2024 Argentina cannot afford.
The Senate session began at 17H00 GMT. The Congress Square was fenced and under police surveillance, after a week ago, when the Chamber of Deputies voted in favor, protesters stoned the building and smashed the windows of several offices, including those in Vice President Cristina Kirchner's office.
To enter into force, the agreement must also be submitted to the IMF Board of Directors in Washington for approval.
And time is running out. Between March 20 and 22, Argentina must pay a capital maturity of $2.9 billion, an amount that it does not have, according to the Central Bank.
“We have a difficult decision to make: to approve the arrival of the IMF when we had freed ourselves in 2006,” said pro-government senator Ricardo Guerra, alluding to when then-President Néstor Kirchner canceled some $9.5 billion of debt to the multilateral body and ended his review visits.
Guerra stressed that the IMF “left only bad experiences” in Argentina, but argued that it is necessary to approve the loan to “free the economy from such a burden, so as to return to growth, and recreate hope and credibility.”
The new credit agreement will be the 13th that Argentina has signed with the IMF since the return of democracy in 1983.
- Against inflation -
This extended facilities program provides for 10 quarterly reviews and a four-year grace period. Payments must be made from 2026 to 2034.
In return, Argentina is committed to reducing the fiscal deficit from 3% of GDP in 2021 to 0.9% in 2024.
The centre-left president Alberto Fernández thanked the parliamentarians who support the project. “We are going to have a clearer horizon. We will know that there is a problem that has not been solved, but that is beginning to be solved, which is that cursed debt that we inherited,” he said, alluding again to the fact that the agreement was signed by Argentina under the government of its predecessor, in the midst of a currency exchange run.
For Victor Beker, director of the Center for the Study of the New Economics of the University of Belgrano, “if the program is approved it decreases the degree of uncertainty a little. The possibility of default disappears and goals are set that the government will try to fulfill. Not all the unknowns are cleared, but the economic agents know that there will be a supervisory body (the IMF).”
The objective, according to the IMF, is to “reduce persistent high inflation”. However, spokesman Gerry Rice said on Thursday that “this, of course, will be a challenge in the light of the evolution of the world situation, as rising commodity prices are affecting inflation around the world”, amid the war in Ukraine.
Argentina recorded a 4.7% increase in the consumer price index in February over January, with a 7.5% increase in the food sector, bringing inflation in 12 months to 52.3%.
When the IMF board approves the agreement, Argentina will receive a first disbursement of about $9.8 billion, which will allow it to address next week's maturity and strengthen international reserves.
But there is distrust in society about the measures that the government will take to meet the goals of the agreement.
“In relation to the economic situation we are going to be worse, that is the reality. We are paying for a scam,” Monica Sulle of the Socialist Workers Movement told AFP during a protest against the IMF this week.
The initial agreement was signed for $57 billion, the highest amount ever granted by the IMF. However, Argentina received only $44 billion, as President Fernández gave up pending stretches when he took office in December 2019.
nn/ls/rsr/mr
Últimas Noticias
Debanhi Escobar: they secured the motel where she was found lifeless in a cistern
Members of the Specialized Prosecutor's Office in Nuevo León secured the Nueva Castilla Motel as part of the investigations into the case
The oldest person in the world died at the age of 119
Kane Tanaka lived in Japan. She was born six months earlier than George Orwell, the same year that the Wright brothers first flew, and Marie Curie became the first woman to win a Nobel Prize
Macabre find in CDMX: they left a body bagged and tied in a taxi
The body was left in the back seats of the car. It was covered with black bags and tied with industrial tape
The eagles of America will face Manchester City in a duel of legends. Here are the details
The top Mexican football champion will play a match with Pep Guardiola's squad in the Lone Star Cup
Why is it good to bring dogs out to know the world when they are puppies
A so-called protection against the spread of diseases threatens the integral development of dogs
