Argentina and the International Monetary Fund are going back to the drawing board again on the country’s $44 billion program as a record drought is expected to push the country into recession, according to an Economy Ministry official who asked not to be named to discuss upcoming changes.
(Bloomberg) — Argentina and the International Monetary Fund are going back to the drawing board again on the country’s $44 billion program as a record drought is expected to push the country into recession, according to an Economy Ministry official who asked not to be named to discuss upcoming changes.
The official added that all options are on the table in the fifth review of the IMF’s biggest program, but didn’t provide more specifics. An IMF spokeswoman didn’t immediately respond to a request for comment during weekend hours. The Economy Ministry declined to comment.
Read More: Argentina’s Epic Drought Sends Economic Crisis to New Extremes
Economy Minister Sergio Massa met with IMF First Deputy Managing Director Gita Gopinath Friday on the sidelines of the lender’s spring meetings where they discussed the economic impact of Argentina’s worst drought on record. La Nacion newspaper reported the development earlier Saturday.
It’s another setback for Argentina’s program, coming less than two weeks after the IMF changed a key target for the third time since the deal began about a year ago. During that review, IMF staff and Argentine officials cut the level of net reserve accumulation, or cash stockpile, needed to be built up at the central bank this year to $2.6 billion from $4.8 billion previously.
As of April 3 when the IMF published its full report, officials kept the key primary fiscal deficit target for this year at 1.9% of gross domestic product. Achieving that target “remains essential” to the program, Gopinath said in a statement on April 1.
Earlier this week, the IMF slashed its growth forecast for Argentina to 0.2% of GDP from 2% previously, while private economists in Buenos Aires are projecting a 4% contraction. Government data published Friday showed prices rose 104% in March from a year ago. Economists at JPMorgan Chase & Co. now forecast 130% inflation by the end of this year.
–With assistance from Maria Eloisa Capurro.
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