Argentina’s Economy Ministry and the International Monetary Fund (IMF) are negotiating potential changes to their current agreement in order to redefine certain goals included in the country’s program, according to ministry sources. U.S. Deputy Secretary of State Wendy Sherman confirmed the negotiations to the Argentine press during her visit to Buenos Aires this week

Yesterday, Economy Minister Sergio Massa met first with Gina Gopinath, the IMF’s first deputy managing director, and later with Managing Director Kristalina Georgieva. The focal point of renegotiation is the critical drought that affects the Argentine trade balance and negatively affects fiscal incomes.  

The drought of historic severity has devastated the harvests of key crops such as soybeans and corn, slashing the country’s inflow of dollars and complicating its attempts to accumulate international reserves. The IMF’s Executive Board approved a modification of international reserve accumulation targets on April 1st but analysts say even the revised goals will be difficult for Argentina to meet.

In March 2022, Argentina signed an agreement renegotiating the US$ 44 billion debt former President Mauricio Macri acquired in 2018. The deal includes an economic program with certain targets that Argentina must comply with to receive disbursements or payments every three months, which are used to pay for the previous debt with the IMF.

The government’s request to ease the country’s targets was also on the agenda at a bilateral meeting between  President Alberto Fernández and U.S. President Joe Biden held on March 29. Renegotiating the agreement’s objectives was hinted at by the IMF and government authorities over the few past weeks.

At a press conference in Washington D.C. during the IMF and World Bank’s spring meetings this week, Georgieva explicitly acknowledged the severity of the drought’s impact on Argentina’s economy and the knock-on effects for lawmakers. 

“We know that Argentina was hit by a severe drought that has undermined the performance of the economy and it has harmed people in the country significantly. That has complicated the job of policymakers,” Georgieva said. 

Massa in DC

Apart from his talks with the IMF, which have yet to yield any concrete results, Massa also signed several agreements for 2023 with the Inter-American Development Bank (IDB) for a credit line of USD$ 600 million for investments and health in Argentina, the World Bank for US$ 950 million for drought relief and education programs, and the Saudi Fund for Development (SFD) for US$ 500 million that will be aimed at infrastructure projects. 

In its first major investment in Argentina, the SFD will partly finance the Néstor Kirchner Gas Pipeline.