Strategy Note /

Argentina's IMF programme in eight charts

  • We summarise our research on Argentina and the recently approved IMF programme

  • It's been a long time coming, but now comes the hard part – implementation

  • Meanwhile investors are sceptical that the authorities can rise to the challenge

Argentina's IMF programme in eight charts
Stuart Culverhouse
Stuart Culverhouse

Chief Economist & Head of Fixed Income Research

Tellimer Research
4 April 2022
Published byTellimer Research

Over a week has passed since the IMF approved its programme for Argentina, a 30-month extended fund facility (EFF) for an amount of US$44bn (1,001% of quota).

It was a long time coming (over two years in the waiting), but now comes the hard part –implementation.

And so far, foreign bondholders have yet to be convinced.

Here we illustrate the situation in eight charts, summarising our previous research.

Argentina's IMF programme is anchored on gradual fiscal adjustment...

Primary balance (% of GDP)

...and disinflation, albeit one that is also slow and uncertain

CPI inflation (% yoy, end year)

Meanwhile, the large programme refinances the existing payments to the Fund, pushing them back several years

IMF principal repayment schedule (US$ mn)

The programme's aim is to support growth...

Real GDP growth (% yoy)

...and to put public debt back on a sustainable path

Federal government debt (% of GDP)

However delivering even the programme's modest fiscal adjustment will be politically challenging...

Composition of fiscal adjustment (% of GDP)

...and the authorities will need to restore market confidence in order to meet still high financing needs

Public sector gross financing needs (% of GDP)

Foreign bondholders remain unconvinced, even with the low debt service in the near term

Argentina US$ bonds – price

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Argentina: IMF approves programme, now comes the hard part