Argentina: Seventh Review under the Extended Arrangement under the Extended Fund Facility, Requests for Rephasing of Access, Extension of the Arrangement, Waivers of Nonobservance of Performance Criteria, Modification of Performance Criteria, and Fina

Since completion of the last reviews, Argentina’s imbalances and distortions have become dangerously acute, while the program has gone significantly off-track, reflecting highly expansionary and inconsistent policies of the previous administration. The fiscal deficit rose further, international reserves were depleted and reliance on interventionist measures intensified, leading to triple digit inflation, a further deterioration of the central bank’s balance sheet and a sharp rise in importers’ commercial debt. The new administration has begun to take bold actions to restore macroeconomic stability and address many of the long-standing impediments to growth and investment. These initial actions are starting to bear fruit, although the path to stability will be challenging. Efforts are underway to build the social and political support for the stabilization plan, with a divided Congress and a fragile social situation presenting important implementation challenges.