Argentina Congress debates IMF Deal 

Argentina’s Congress started debating and will likely vote on a potential new deal between the South American country and the International Monetary Fund (IMF), a key hurdle for the program the country needs to get its finances in order.

The lower Chamber of Deputies began debate this morning on a decree issued by President Javier Milet’s government earlier this month that supported a new IMF program. Congress can block the decree if both chambers vote against it.

The country, which is battling with negative net foreign currency reserves after years of over-spending, currency crises and regular defaults, is the IMF’s biggest borrower with 22 loan programs to date. It is still repaying a 2022 $44 billion deal.

The government says a new deal is needed to help bolster the central bank’s accounts and allow the country to move towards undoing capital controls that have been in place since 2019 and that it says stymie business and investment.

Milei’s libertarian party has only a small minority in Congress, but he has pushed through some of his agenda by winning over conservative and moderate allies. The party is confident it will get enough support for the IMF decree

“I support this though with a critical eye. I will vote in favor,” moderate Peronist opposition lawmaker Miguel Pichetto told reporters on Wednesday.

“I have a critical view of the DNU decree. I think it lacks explanations but I think we need to think primarily about Argentina.”

Milei, a political outsider who won a shock election in 2023 pledging to end years of economic crisis in Argentina, has lowered inflation and overturned a deep fiscal deficit, but now faces the challenge of reviving growth and rebuilding state coffers.

The IMF deal will test Milei’s ability to win over legislative support. He angered some lawmakers by pushing the deal via a presidential decree rather than through a regular bill in Congress.

His tough austerity and spending cuts have also increased poverty rates and triggered protests against his government, especially by hard-hit pensioners. A regular weekly protest was expected later on Wednesday outside Congress.

REUTERS/Christopher Ojilere