The IMF thus promised to return during 2023 on a key issue for Argentina: the extra cost that developing countries had to pay for the increase in fuel, money that ultimately ended up harming the chances of recovery in the first official post-pandemic year. It is not an unknown subject for the country. Sergio Massa had already discussed it last October with Kristalina Georgieva during the annual autumn meeting of the IMF and the World Bank; where the managing director of the Fund confirmed that a debate would be opened next year on the consideration of the energy cost generated by the war.
In the specific case of Argentina, the debate was advanced, and the fundamental chapter was not whether or not there would be recognition, but the amount of it. For Argentina, this would have exceeded US$4.5 billion; while the IMF speaks of no more than US$3,000 million. It is assumed that when the parties make contact again, the issue will be on the table again, and finally there will be an agreement on the amount to be paid from the IMF. This will be in SDRs and will serve directly to strengthen the reserves of the Central Bank. It is money that, moreover, should not be taken into account as part of the Extended Facilities in force, but as general compensation for the increase in fuel prices during this year, and the money that the country had to face for this cost of an exogenous nature. . The same chapter linked to the Ukrainian crisis should be taken into account by the IMF when analyzing the evolution of the Central Bank’s reserves this year, and the possibility of partly reducing the obligation to have an increase of more than u $s4,000 million during 2023.
Regarding the Argentine case, the Board meeting only stopped to listen to the explanations of the technical staff of the organization led by the North American Gita Gopinath, who only stressed to the directors of the entity that the country had met the goals for the third quarter, and that there were technical issues to resolve during 2023 to close the first year of the Extended Facilities. Now, with the approval and the final announcement, before Friday the 30th the country will receive the money so as not to fall into default with the IMF itself.
The Fund will enter a kind of recess forced by the end of the year holidays from next Monday. Being an international organization, most of its officials travel to their countries and regions of origin. They will return at the end of the first half of January. Until then, there will be no inspections from Washington to Buenos Aires.
Source: Ambito
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