Argentina Strikes $20 Billion Deal With IMF To Fuel Milei's Reforms

The IMF says the deal builds on "impressive early progress in stabilizing the economy."

Argentina has reached a $20 billion agreement with the International Monetary Fund (IMF) that will help President Javier Milei advance the next phase of his pro-market reforms.

The IMF announced on Tuesday that it had reached a staff-level agreement with Argentina for a new loan under its Extended Fund Facility program. The funding will be disbursed over 48 months.

In its statement, the IMF said the deal "builds on the authorities' impressive early progress in stabilizing the economy, underpinned by a strong fiscal anchor, that is delivering rapid disinflation and a recovery in activity and social indicators."

Milei celebrated the news by posting a photo on X of himself hugging Economy Minister Luis Caputo.

Argentina has received more bailouts from the IMF than any other country over the past six decades. This loan could become its 23rd IMF program since the 1950s and would add to the $40 billion that Argentina still owes the Fund. 

Past IMF-backed programs have largely failed to stabilize the economy. As the Associated Press reported, previous left-leaning administrations "fell far short of IMF targets and relied on central bank money printing to finance treasury spending, pushing the country's IMF program—launched in 2018 and refinanced in 2022—to a breaking point."

But over the past 16 months, the IMF has increasingly praised Milei's approach, stating that his policies have "resulted in faster-than-anticipated progress in restoring macroeconomic stability."

Since taking office in December 2023, Milei has rolled out sweeping austerity measures aimed at fixing Argentina's long-standing economic dysfunction. His administration cut public spending, fired tens of thousands of public employees, eliminated several public ministries, froze infrastructure projects, and slashed subsidies, among other reforms.

The fresh funds are expected to give Argentina some financial breathing room to continue with its reforms. According to the IMF, the latest agreement "supports the next phase of Argentina's homegrown stabilization and reform agenda aimed at entrenching macroeconomic stability, strengthening external sustainability, and unlocking strong and more sustainable growth."

The next phase could include efforts to lift capital and currency controls—restrictions that have long discouraged foreign investment. The loan is also expected to help rebuild Argentina's foreign currency reserves, ease inflation, and facilitate access to new financing. 

The IMF's executive board still needs to approve the deal, but a decision is expected in the coming days. "When the board discusses the program, the amount of the first disbursement will be known," an IMF spokesperson told Reuters. Officials from Milei's government say they're aiming for at least 40 percent of the funds (about $8 billion) in the first disbursement.