Argentina: Ex-post Evaluation of Exceptional Access under the 2022 Extended Fund Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Argentina

International Monetary Fund

No 2025/003, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper analyzes Argentina’s Ex-post Evaluation of Exceptional Access under the 2022 Extended Fund Facility (EFF) Arrangement. The 2022 EFF came about in extremely difficult circumstances. Argentina was unable to regain external viability under the 2018 Stand-By Arrangement and faced large and concentrated repurchase obligations to the IMF. The combination of a gradualist reform strategy, large adverse shocks, and progressively weaker implementation resulted in outcomes substantially worse than in the baseline by end-2023. The program got off to a difficult start, with the surge in global commodity prices due to Russia’s war in Ukraine feeding inflation expectations and creating additional fiscal spending needs that were met through direct and indirect monetization, further fueling inflation. A major course correction subsequently undertaken by the Milei government—notably a sharp fiscal consolidation, an upfront devaluation, and an end to monetary financing of the budget helped Argentina avert a full-blown crisis and make important strides toward macroeconomic stabilization. Overall, the 2022 EFF did not achieve its original macroeconomic objectives, but it was successful in easing the burden of Argentina’s financial obligations to the IMF by rescheduling repayments over 2026–2034, and may have helped Argentina avoid even worse outcomes in 2022–2023.

Keywords: program ownership; IMF view; disinflation process; Policy strategy; lending decision; risk tolerance; Fiscal consolidation; International reserves; Inflation; Reserves accumulation; Global (search for similar items in EconPapers)
Pages: 122
Date: 2025-01-10
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