Negotiation with the IMF: the multilateral banks would contribute fewer resources than those needed by the Government to cover its needs in 2022

World Bank President David Malpass

Multilateral banks plan to disburse about USD 4 billion this year to Argentina, a sum that, a priori, seems somewhat far from the needs of the Government to consolidate its growth mentioned by the International Monetary Fund (IMF) in its latest statement.

Part of the disbursements will depend on the signing of the agreement with the IMF, according to information from these entities.

It should be remembered that the Minister of Economy, Martin Guzman, had mentioned that it would have about USD 12,000 million from the World Bank and the Inter-American Development Bank (IDB) this year, among other entities, although later it had to correct that forecast.

The World Bank plans to transfer at least USD 1.2 billion to the country this year; Other funds could arise, as happened in 2021 with the USD 500 million that were made available for the purchase of vaccines against Covid.

The presiding entity David Malpass has an active portfolio of 23 investment projects with Argentina for a total of US$7,380 million dollars and two donations for an amount of US$10 million dollars. The strategy focuses on supporting health, environment, education, infrastructure, labor market and social protection programs.

Since 2019, the bank has approved programs to improve inclusion in high school (for USD 341 million), support the social rate in the province of Buenos Aires (USD 150 million), support the Covid emergency (USD 35 million); reinforcement of the protection of children and young people (USD 300 million); provision of water and sanitation in vulnerable areas of Buenos Aires (USD 300 million); digital inclusion and innovation in public services (USD 80 million); modernization of the Miter railway line (USD 347 million); progress in the work for the development of the Matanza-Riachuelo (USD 265 million); and support for universal health coverage (USD 300 million).

Mauricio Claver-Carone, President of the IDB
Mauricio Claver-Carone, President of the IDB

For its part, The IDB plans to transfer USD 1,800 million this year to Argentina, with USD 1,500 million for investment projects and USD 300 million for freely available credits.

As of March 31, 2021, the active portfolio of sovereign guaranteed operations in Argentina was approximately US$10.05 billion, made up of 57 loans. LIDB Invest’s active portfolio, for the private sector, consisted of 25 operations for an approximate amount of US$591.1 million, while IDB Lab’s active portfolio (for private innovation projects) included 18 operations for a value of $17.9 million. Last year, the entity that presides over Mauricio Claver Carone expected to disburse USD 1,438 million without the program with the IMF and some USD 1,900 million if that agreement had been signed.

In the document that explains the strategy for the country between 2021 and 2023, the IDB emphasized that “Argentina faces the challenge of stabilizing the economy and raising the impact of public policies, guaranteeing that the use of public resources is sustainable,” in line with the Fund’s usual rhetoric.

At the same time, CAF -development bank of Latin America- estimates to disburse USD 1,000 million this year, after having contributed some USD 1,670 million in 2021 to the country.

In their written statement on Friday, when the principle agreement with Argentina was announced, the Fund’s staff indicated that “We have agreed that additional financial support from Argentina’s international partners would help bolster the country’s external resilience, and its efforts to ensure more inclusive and sustainable growth.”

The question is whether that money will be enough to cover this year’s financial needs, since In principle, Guzm├ín had estimated that it would reach USD 12,000 million, but in December he admitted in Congress that it would be USD 5,000 million to finance public works and other capital expenses.

It will be necessary to see then if now these banks redouble their disbursements or the minister has to appeal to other financial windows to obtain resources; In principle, the advances with the IMF will allow the arrival of funds from other regional or bilateral entities, so the Government will light a candle to each dollar that arrives from abroad, beyond the disbursements of the Fund itself that will begin when the agreement is finally finalized. concrete.

KEEP READING:

Salaries: how the race against inflation ended in 2021 and what is expected for this year
What impact can the agreement with the IMF have on prices and inflation expectations?
Inflation: 10 reasons why it is not convenient for the Government to accelerate now
Consumer confidence increased 6.3% in January, but remains below the level received by Alberto Fernández



Reference-www.infobae.com

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