News Brief No. 99/24

News Brief: IMF Completes Third Review Under EFF for Argentina

May 26, 1999

IMF Completes Third Review Under EFF for Argentina

The International Monetary Fund's (IMF) Executive Board completed the third review under the Extended Fund Facility (EFF) arrangement for Argentina. Following the review, IMF Deputy Managing Director Stanley Fischer stated:

"Argentina is to be commended for its continued prudent policies. As with a number of other countries in the region, Argentina has had to bear the adverse consequences of external shocks, which have taken a significant toll on economic performance. Nevertheless, the sound macroeconomic management, the strengthening of the banking system and the other structural reforms carried out in recent years in the context of the currency board arrangement, have had beneficial effects on confidence, and have allowed the country to deal with these challenges."

"With a view to supporting economic activity, the program's ceiling on the deficit of the federal government has been raised to Arg$5.1 billion (1.5 percent of GDP) from Arg$2.95 billion (0.8 percent of GDP), thereby accommodating most of the impact of the cyclical economic downturn on fiscal revenues."

"Further progress on the authorities' structural reform agenda is necessary to ensure competitiveness and strong economic growth in the medium term. It is particularly important to obtain the early approval and implementation of the structural reforms that are being considered in the fiscal area, such as the fiscal convertibility law and the reforms of social security and revenue sharing with the provinces, as well as the proposed reforms in financial and labor market legislation."