IMF unlocks $4.7bn for Argentina amid economic crisis, Milei austerity cuts

Inflation has crossed 160 percent in Latin America’s third-biggest economy, with 40 percent of population living in poverty. Latin America’s third-biggest economy is facing dire economic challenges after decades of debt and financial mismanagement, with inflation surpassing 160 percent year-on-year and 40 percent of Argentinians living in poverty. With this deal, Argentina’s new President Javier Milei, who took power in December and inherited a deep social, economic and financial crisis, puts back on track a $44bn bailout package with the IMF that dates back to 2018. “The new administration is already implementing an ambitious stabilization plan, anchored on a large upfront fiscal consolidation, along with actions to rebuild reserves, correct relative price misalignments, strengthen the central bank’s balance sheet, and create a simpler, rules-based, and market-oriented economy,” the IMF said. In December, the government said it would slash the value of its currency, the peso, by more than 50 percent against the US dollar and announced a raft of other austerity measures, including sweeping subsidy cuts, cancellation of tenders for public works projects, and plans to axe nine government ministries.