Argentina’s Congress has authorized President Javier Milei to negotiate a new IMF loan, complementing an existing $44 billion debt. The loan aims to boost foreign currency reserves and cover debt payments, amidst ongoing protests against austerity measures. While inflation has decreased, public unrest highlights the economic challenges faced by the government.
On March 11, 2023, Argentina’s Congress authorized President Javier Milei to negotiate a new loan from the International Monetary Fund (IMF), in addition to the existing $44 billion debt. The proposed loan aims to enhance the central bank’s foreign currency reserves and address upcoming debt obligations. The exact amount of the new loan has not yet been revealed, but support from Congress was paramount for proceeding under a 2021 law requiring such authorization.
In the Chamber of Deputies, the vote concluded with 129 in favor, 108 against, and six abstentions, allowing Milei to move forward with the negotiations despite his minority status in Congress. However, this decision came in the midst of widespread protests against Milei’s austerity measures and negotiations with the IMF, with demonstrators gathering near the legislature.
Rodolfo Celayeta, a 73-year-old retiree participating in the peaceful protests, expressed concern: “Every time something is agreed with the IMF, things get worse for us.” Last week, violent confrontations with police resulted in injuries to 45 individuals, while the current protests, although less aggressive, still involved minor clashes. The security measures included the deployment of approximately 2,000 officers, which authorities deemed successful.
President Milei asserts that the new IMF loan is essential for settling debts with the central bank and aims to “exterminate” the country’s chronic inflation. Argentina currently faces one of the highest inflation rates globally, although measures taken since Milei’s inauguration have somewhat slowed price increases while simultaneously increasing poverty levels. Inflation has decreased from an astounding 211 percent year-on-year in December to 66 percent currently, marking a significant but fragile improvement.
Discussions with the IMF began in November to establish a new extended fund facility to replace a previous agreement initiated in 2022, designed to help manage Argentina’s substantial debt obligations, including the $44 billion loan secured by former president Mauricio Macri in 2018, the largest loan ever approved by the IMF.
In conclusion, President Javier Milei’s successful negotiation for Congressional approval to seek a new IMF loan underscores the government’s efforts to stabilize Argentina’s economy amid rising inflation and public dissent. The loan is anticipated to alleviate debt pressures and bolster foreign reserves, although it prompts mixed reactions from the public, reflecting a broader concern regarding austerity measures and their impact on citizens.
Original Source: www.sanfordherald.com
