Argentina’s Congress Approves New IMF Loan for President Milei

Argentina’s Congress has approved President Javier Milei’s request for a new IMF loan to enhance foreign reserves and manage debt. The vote saw 129 in favor against 108 opposing. While inflation is decreasing, protests against austerity measures occur amid Milei’s administration efforts to stabilize the economy.

Argentina’s Congress has approved President Javier Milei’s request for a new loan agreement with the IMF, in addition to the existing $44 billion debt the country owes. The new 10-year loan aims to bolster the central bank’s foreign reserves and manage impending debt obligations. The exact loan amount has not yet been disclosed.

To secure this financing, President Milei sought Congressional approval as per a 2021 law that mandates the president to acquire consent from both houses of Congress before accessing IMF funds. The lower house, known as the Chamber of Deputies, voted in favor with 129 votes supporting the measure, 108 opposing it, and six abstentions.

Though Milei’s libertarian party holds a minority position in Congress, it has successfully established temporary alliances to advance its economic agenda. The vote coincided with protests outside the legislature, where demonstrators voiced their opposition to Milei’s austerity measures and ongoing negotiations with the IMF. While the protests were larger than previous ones, they remained largely peaceful.

Milei has asserted that the new loan will enable the government to settle debts with the central bank and aim to “exterminate” inflation, a longstanding economic issue for Argentina. Presently, the country has one of the highest inflation rates globally. Under Milei’s administration, inflation has decreased from 211 percent year-on-year at the end of 2023 to 66 percent currently, although the poverty rate has increased as public spending is curtailed.

The government initiated discussions with the IMF in November to negotiate a new Extended Fund Facility (EFF), designed to replace the existing agreement established in 2022. This EFF is intended to assist Argentina in managing its debt and repaying the substantial $44 billion loan negotiated by former president Mauricio Macri in 2018, which was the largest loan ever issued by the IMF.

In conclusion, Argentina’s Congress has granted President Milei authorization to pursue a new IMF loan aimed at stabilizing the economy. Despite ongoing protests against austerity measures, the government believes this financial support will help manage inflation and public debt. The steps taken reflect Argentina’s enduring challenges with economic management and reliance on the IMF for fiscal stability.

Original Source: www.france24.com