The International Monetary Fund on Wednesday approved the latest review of its $44 billion (€40.7 billion) program with Argentina, allowing for the disbursement of $4.7 billion.

The loan supports the new government of President Javier Milei, which is implementing massive austerity measures to get the country's ailing economy back on track.

"The new administration is taking bold actions to restore macroeconomic stability and begin to address long-standing impediments to growth," IMF chief Kristalina Georgieva said in a statement announcing the disbursement.

She also said that "inconsistent policies of the previous government" had left a "difficult inheritance."

Lamakers debate Milei's mega-bill

The IMF announcement came on the same day that Argentina's lower house of Congress began what is expected to be a marathon debate on Milei's mega-bill to reform the economy, politics and even some aspects of private life.

Milei, a libertarian and self-described "anarcho-capitalist," took office in December vowing to slash spending and end a decades-long economic crisis in South America's third-largest economy, where annual inflation is running at more than 200%.

Milei began his term by devaluing the peso by more than 50%, cutting government subsidies for fuel and transportation, halving the number of government ministries and eliminating hundreds of rules in an effort to deregulate the economy. But his austerity measures have also sparked backlash and protests.  

IMF expects contraction in Argentina

The IMF board also approved an extension of the program through December 31, 2024, "along with some rephasing of planned disbursements within the existing envelope of the program." The IMF did not provide further details on the changes.

Earlier this week, the IMF lowered its forecast for Argentina's GDP in 2024 to a contraction of 2.8% from a previous view of expansion of 2.8%, largely due to the expected impact of the new government's proposed reforms.

dh/jsi (AFP, Reuters)