The International Monetary Fund has stepped in to shore up the Argentinian economy with a $50bn (£37bn) loan agreement.
Argentina requested assistance from the international lender of last resort on 8 May after the peso weakened sharply in an investor exodus from emerging markets.
As part of the deal, which is subject to IMF board approval, the government pledged to accelerate plans to reduce the fiscal deficit – the gap between government spending and revenue – even as authorities now foresee lower growth and higher inflation in the coming years.
The deal marks a turning point for Argentina, which for years shunned the IMF after a devastating economic crisis in 2001-02 that many Argentinians blamed on IMF-imposed austerity measures. The president Mauricio Macri’s decision to turn to the lender has triggered national protests.
“There is no magic: the IMF can help but Argentines need to resolve our own problems,” the treasury minister said at a news conference on Thursday. Nicolás Dujovne said he expected the IMF board to approve the deal during a meeting on 20 June. After that, he said he expected an immediate disbursement of 30% of the funding, or about $15bn.
Argentina will seek to reduce its fiscal deficit to 1.3% of gross domestic product in 2019, down from 2.2% previously, Dujovne said. The deal calls for fiscal balance in 2020 and a fiscal surplus of 0.5% of GDP in 2020.
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