Argentina IMF deal could unlock $900 million

The International Monetary Fund said on Tuesday it had reached a staff-level agreement with Argentina that could unlock about $900 million for the country.

The agreement covers the third review of Argentina's bailout and is subject to approval by the IMF's Executive Board. If approved, the tranche can be disbursed to the Argentine government.

Argentina agreed in 2025 to an extended fund facility with the IMF worth about $20 billion over four years, as the country faced high inflation and currency depreciation.

President Javier Milei has since pursued reforms that include cutting public spending and trying to rein in inflation. The spending cuts, backed by the IMF, have been unpopular and have prompted frequent protests.

Inflation has fallen from triple digits when Milei took office in December 2023 to 33.5 percent.

The IMF said Milei's reform programme had delivered "impressive results" and cited improvements in fiscal buffers and foreign exchange reserves. It also praised reforms in trade, labour, investment and capital markets.

As part of the latest agreement, the IMF said Argentina committed to delivering a primary surplus of 1.4 percent of GDP this year and next. The IMF said the central bank would take actions to support disinflation and reserve accumulation while allowing exchange rate flexibility within a band.

Argentina is the IMF's largest debtor. It has $1.2 billion in debts to the Fund due this year and $7.8 billion due next year.

The economy remains weak in other areas. Consumer activity is anemic, debt defaults are rising, and mortgage defaults have tripled over the past year to 12.8 percent, the highest level in 20 years. Earlier this month, the IMF downgraded its forecast for Argentina's 2026 GDP growth to 2.1 percent.