World Bank and IDB to loan Argentina US$1.3 billionĀ 

Economy Minister Sergio Massa made the announcement from Washington D.C.

Economy Minister Sergio Massa announced on Tuesday afternoon that the World Bank and Inter-American Development Bank (IDB) will loan Argentina US$ 1.31 billion. The minister confirmed the loan at a press conference at IDB headquarters in Washington, D.C, following a meeting with its director Ilan Goldfjan.

“The main objective of this is to complete a quota of US$ 1.3 billion between now and the end of the year thanks to additional financing from the World Bank and the IDB,ā€ Massa said. ā€œThis is fundamental for Argentina to continue strengthening reserves, but also to continue financing development projects.ā€

Argentina is going through a major international reserve scarcity crisis, caused mainly by a historic drought that slashed some US$20 billion in agricultural exports. Net reserves are calculated at negative US$10 billion.

US$450 million from the World Bank will go toward welfare programs Tarjeta Alimentar (food aid) and Universal Instalment per Child (AUH), bolstering the Social Development Ministryā€™s budget. Another US$200 million are destined for the Economy Ministry in order to finance imports and exports by small and medium-sized enterprises.

Meanwhile, the IDB will finance two infrastructure projects, giving US$650 million for the expansion of the Salto Grande dam and a bridge joining Chaco and Corrientes provinces. Part of those funds will also go toward software companies that exportt.

The announcements come before the International Monetary Fund (IMF) board meets on Thursday to decide on whether or not to approve the fifth and sixth reviews of the countryā€™s economic program with the lender. 

ā€œWe are convinced that tomorrow the review will be approved that will allow us to access a US$7.5 billion disbursement for Argentina,ā€ the minister said.

The government and the IMF signed an Extended Fund Facility agreement in 2022 after renegotiating the US$44 billion debt former President Mauricio Macri acquired in 2018. The deal includes an economic program that Argentina must comply with in order to receive disbursements every three months, which are used to pay for the previous debt with the Fund.

The announced US$7.5 billion disbursement comes from the combination of the fifth and sixth reviews of the program. The next review is expected to take place in November, after the presidential elections.

Massa is set to meet the IMF head Kristalina Georgieva separately on Thursday afternoon, telling TĆ©lam that the objective is to review the whole disbursement process. Argentina has met its IMF payments by taking loans from Qatar, China, and the Development Bank of Latin America and the Caribbean (CAF for its Spanish acronym). According to the minister, they have yet to define what will be transferred to Argentina in dollars and yen, ā€œtaking into account that part of the disbursements were made in SDRs but another in yen.ā€

ā€”TĆ©lam

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